While legacy automaker Ford (F) may be somewhat insulated from the impact of tariffs as it does a lot of its production in the United States, that does not make it a guaranteed hit with suppliers. In fact, a recent report out put Ford on the decline with its suppliers. This was enough for shareholders to get concerned, and sent shares slumping fractionally in Monday afternoon’s trading.
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Plante Moran recently released the 25th annual edition of its North American Automotive OEM – Supplier Working Relations Index (WRI), and the numbers were not as good for Ford as they might have been. Ford, in fact, tended toward the middle of the pack, beating Stellantis (STLA) but faltering substantially against General Motors (GM). General Motors came out ahead of the others, with a total score of 310, its first time breaking 300. Ford came in in the middle at 191, and Stellantis brought in 141.
The biggest factor in the scoring, noted Plante Moran’s principal Angela Johnson, was “…their ability to help suppliers reduce their costs to serve the OEM and manage uncertainty.” Major factors determining the scoring included buyer knowledge, accessibility, engagement, communication and responsiveness.
A More American Maverick?
The Maverick pickup truck has been a winner for Ford of late, and there are signs that its production is about to get a lot more Americanized. Though nothing concrete has been established just yet, Jim Farley—Ford’s CEO—has not yet refused the notion of shifting production on the Maverick from Mexico to the United States.
Such a move would likely help reduce the impact from tariffs even further, and Ford already enjoyed some of the lowest impacts from tariffs around. But with Ford convinced that the tariffs will be in play for the next three years at least, minimizing the impact is not necessarily a bad play. By bringing some production back to the United States, it improves on that score, and likely also buys itself some more goodwill, and potentially, new customers from there.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 12 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 11.11% loss in its share price over the past year, the average F price target of $9.59 per share implies 10.58% downside risk.
