Automotive major Ford (NYSE:F) boosted investor confidence by reaffirming its operating guidance for the full year 2024 at yesterday’s Bank of America Securities Auto Summit.
The company expects adjusted EBIT of $10 billion to $12 billion and adjusted free cash flow of $6 billion to $7 billion for the year. It plans capital expenditures in the range of $8 billion to $9.5 billion during this period. Separately, yesterday’s Baltimore bridge collapse is expected to impact Ford’s supply chain.
Eye on Growth
The automaker is banking on its Ford+ growth plan to drive performance. This comprehensive plan includes prioritizing the manufacturing of a diverse range of gas, hybrid, and electric vehicles, aiming to increase profit margins and reduce cyclicality simultaneously. John Lawler, the CFO of Ford, noted that the company is on track to clock cost efficiencies to the tune of $2 billion. The company is also gearing up to launch a new product in its F-150 offerings this year.
Impact of Baltimore Bridge Collapse
Furthermore, Ford anticipates that the recent collapse of the Baltimore bridge will have repercussions on its supply chain. The bridge collapse resulted from a collision between a container ship chartered by A.P. Moller-Maersk (GB:0O77) (DE:DP4A) and the four-lane bridge. With the port of Baltimore being the primary U.S. port for car shipments, as confirmed by the Maryland Port Administration, Ford is bracing for the impact of this incident.
Is Ford Stock a Buy?
Ford’s share price has remained largely flat over the past six months amid rising competition in the auto sector. Overall, the Street has a Hold consensus rating on Ford. Furthermore, an average F price target of $13.48 implies a modest 8.4% potential upside in the stock.
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