Berenberg Starts Ford (F) at Sell
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Berenberg initiates coverage on Ford (NYSE: F) with a Sell rating and a price target of $10.00.
Analyst Alexander Haissl commented, "We initiate coverage with a Sell rating and a price target of $10 – cycle worries well flagged, but risk on shareholder returns overlooked: We expect the stock to continue its de-rating, as we see meaningful risks to shareholder returns driven by lower operating cash flows and higher investments. Supplemental dividend payments, such as that seen in 2016, are unlikely, as not even the common dividend of $0.60/year is covered, on our 2017 estimates (taking pension payments into account). Contrary to management’s view, we see risk to potential cash inflows from Ford Credit given leverage above the company’s target range and deterioration in profitability. Ford’s current industrial cash balance of $24.3bn is above the target of $20bn, but we view uncovered returns as unsustainable."
Shares of Ford closed at $11.79 yesterday.
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