Automobile manufacturer Ford Motor Co. (NYSE:F) announced a major update today. The company reinstated its FY23 guidance and now expects adjusted Earnings Before Income and Taxes (EBIT) to be in the range of $10 billion to $10.5 billion. It has also projected full-year adjusted free cash flow to land between $5 billion and $5.5 billion.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
The company’s adjusted EBIT forecast includes a $1.7 billion loss in strike-related costs due to production interruptions of high-margin trucks and SUVs. As a result, vehicle wholesales will be “about 100,000 units lower than planned.” Ford initially withdrew its guidance following the Union Auto Workers (UAW) strike.
According to Ford, the U.S. labor deal with UAW is projected to total $8.8 billion, primarily driven by “gross wages, accelerated wage progression, and cost of living adjustments.” As a result, the company expects the anticipated cost per vehicle by 2028 will be around $900, posing a 60 to 70 basis points impact on its adjusted EBIT margin. Ford aims to counter this impact through increased productivity and reduced expenses.
What is the Target Price for F Stock?
Analysts remain cautiously optimistic about Ford stock, with a Moderate Buy consensus rating based on six Buys, four Holds, and two Sells. Ford has slid by more than 15% in the past year. As a result, the average Ford price target of $13.2 implies an upside potential of 27.5% at current levels.
