Citi Reiterates 'Hold' Rating on Ford Motor (F), Reluctant to Place Sell Rating

July 25, 2008 8:34 AM EDT

Citi reiterates a 'Hold' rating on Ford Motor (NYSE: F), lowers price target from $6 to $5.50.

Citi analyst says, "We continue to regard Ford shares as unappealing given their recent outperformance relative to GM (NYSE: GM) shares, mounting headwinds in Ford North America and financing operations, weaker visibility in the absence of cash flow guidance and declining earnings power from adverse mix shifts. While Ford unveiled a robust domestic product plan, we remain skeptical that Ford can reduce fixed costs and enhance car profit margins fast enough to offset lost truck profits and higher commodity costs, absent a clear U.S. macro recovery. Despite our negative fundamental view, we remain reluctant to return to a Sell rating given Ford’s adequate liquidity position and Tracinda’s presence and history as a credible active investor. Rather, we continue to favor short-dated Ford Credit notes in the capital structure."

Ford Motor Company (Ford) is a producer of cars and trucks. The Company and its subsidiaries also engage in other businesses, including financing vehicles. Ford operates in two sectors: Automotive and Financial Services.

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• Kirk Kerkorian
• Tracinda Corp.
• Citi

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