Ford Motor (F) Stock Rallies After Smashing Estimates and Raising Guidance, Reinstated Dividend, Analysts Bulled-up

October 28, 2021 6:50 AM EDT
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Price: $19.60 -3.21%

Rating Summary:
    14 Buy, 13 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 0 | Down: 2 | New: 5
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Shares of Ford Motor (NYSE: F) are up over 10% in pre-open Thursday after the company reported better-than-expected Q3 earnings and raised full-year guidance.

Ford Motor reported Q3 EPS of $0.51 to crush the analyst estimate of $0.27. Revenue for the quarter came in at $35.7 billion versus the consensus estimate of $33.11 billion.

“This is the most exciting Ford lineup I’ve seen, but what matters is that customers love our new products and services – and we’re just getting started. The trajectory of our business gives us huge confidence in Ford+, and we’re obsessively turning the plan’s promise into reality,” said President and CEO Jim Farley.

Ford raised its full-year EBIT guidance to between $10.5 billion and $11.5 billion, while the company still expects to generate adjusted free cash flow of $4.0 billion to $5.0 billion. Moreover, the company reinstated its quarterly dividend, with the payout set at $0.10.

JPMorgan analyst Ryan Brinkman reiterated an Overweight rating and a $20.00 per share price target on Ford “after big beat and raise.”

“We expect a positive reaction Thursday to Ford’s better than expected 3Q earnings report (released after the close Wednesday) which featured stronger than expected revenue, margin, EBIT, EPS, and FCF on the back of a differentiated improvement in semiconductor chip availability which allowed Ford production (wholesale units) to rise +68% sequentially vs. industry global light vehicle production which declined -12% sequentially. This phenomenon allowed Ford to enjoy differentiated volume while at the same time enjoying the same industry pricing tailwinds impacting all automakers as a result of the low inventory environment,” Brinkman said in a client note.

Credit Suisse analyst Dan Levy also reiterated an Outperform rating and a $20.00 per share price target on Ford “after big beat and raise.” The analyst upgraded F last week.

“In our upgrade of Ford to Outperform last week, we highlighted potential for Ford to benefit from both improving fundamentals, and an opportunity to change its perception on long term positioning in EV/AV/digital. Ford’s 3Q beat + raise and capital allocation update/dividend reinstatement reaffirmed that thesis… All-in, the result is very encouraging, reminding us of better-than-expected earnings power, a solid capital allocation plan, and ultimately with the ability to fund the transition to an EV/AV/digital world,” Levy wrote in a client note.

Shares of Ford closed at $15.51 yesterday.

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