After hearing how well General Motors (NYSE:GM) did with its latest deliveries report, all eyes pivoted to Ford (NYSE:F) to see if the streak could continue. Sadly for Ford investors, it did not. Ford slipped slightly to close down 2.35% in Thursday’s trading session after its delivery numbers proved to disappoint shareholders.
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Despite the disappointment, Ford reported that sales were indeed up 9.9%. Though growth was present—and pretty substantial growth at that—it’s a slowdown from the first quarter’s growth rate, and also a significant loss against chief rival GM. In fact, Ford could only put up about half the growth rate that GM did. Ford noted that it sold a combined total of 531,662 vehicles in the second quarter, and the individual segments posted some serious gains. The F-Series pickup line saw a 34% jump in sales, while the Mustang Mach-E electric vehicle line shot up 110% in June against the same time the previous year.
The chief economist at Cox, Jonathan Smoke, then proceeded to rain on automakers’ collective parade by noting that he does “…not believe we are on the cusp of exciting growth ahead. The market will still be limited by total available supply but demand will also be limited by the level of prices and rates…” This is likely true, especially given the trajectory of interest rate hikes engaged in by the Federal Reserve of late. However, looking at some of Ford’s other numbers shows there are problems afoot; the Mustang’s June-to-June was spectacular, but Mach-E sales were down 21.1% for the quarter.
The lackluster growth leaves Ford analysts in something of a quandary. With four Buys, four Holds, and two Sells, Ford stock is classified as a Hold by analyst consensus. Moreover, with an average price target of $14.13, Ford stock also comes with 5.67% downside risk.
