Ford released its January retail sales results yesterday, showing that it has beaten the overall industry by four percent. Special Utility Vehicles (SUVs) were the best performers as sales of Ford SUVs grew 8.7% compared to Jan. 2020, giving them their best-ever January start.
Andrew Frick, vice president of Ford (F) Sales in U.S. and Canada, said, “January embodies the continued momentum we see for 2021, thanks to a new lineup of must-have products, including F-150, Bronco Sport, Mustang Mach-E and later this year – Bronco. We’re seeing customers and dealers excited about the new content and features we’re offering, and we look forward to delivering for them.”
In other news, Ford announced on Tuesday that it was investing $1.05 billion in its South African manufacturing operations. This represents South Africa’s biggest investment in their automotive industry and is Ford’s biggest investment in South Africa since its first involvement with the country 97 years ago.
While this is good news for South Africa, Reuters has reported that Ford has terminated its plans to launch a 50/50 joint venture with China’s Zotye Automobile. The two companies had signed a memorandum of understanding in 2018 and were planning to invest a combined $756 million, but Ford has decided to pull out of the deal, citing changes in Chinese regulatory policies since the memorandum was signed, according to Reuters. (See Ford stock analysis on TipRanks)
J.P. Morgan analyst Ryan Brinkman upgraded Ford to a Buy two weeks ago and set his price target at $14. This implies upside potential of around 25% from current levels.
Brinkman’s Street-high price target is based on the “incoming tide of hot new products we expect will bring substantial volume, mix, and pricing benefits.” He specifically mentioned the Mustang Mach-E all-electric crossover vehicle, which just started shipping to customers.
Consensus among analysts is a Hold based on 4 Buys, 5 Holds and 2 Sells. The average analyst price target of $10.21 suggests that Ford has overshot its valuation and its shares have around 9% downside potential over the next 12 months.
Ford receives a Market Neutral 6 out of 10 on TipRanks Smart Score, which implies that the stock is projected to behave in line with market expectations.
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