UPDATE: Daiwa Securities Downgrades Ford (F) to Underperform (4)
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Daiwa Securities analyst Jairam Nathan downgraded Ford (NYSE: F) from Neutral (3) to Underperform (4) with a price target of $19.00.
The analyst comments "We downgrade our rating to 4/Underperform from 3/Neutral as we see current valuations not reflecting risks to margins during the transition to EVs from ICE vehicles and a higher interest rate environment. As depicted in chart 5 on page 5, a declining interest rate spread has historically led to multiple contraction. We attribute part of the recent uptick in Ford’s stock to the company’s 12% stake in Rivian and are raising our target to $19 from $16 to reflect the same. Our $19 target assigns equal weights to a $17 P/E-based valuation (9x 2023 EPS estimate of $1.85) and $16/share free cash flow valuation. To this average we add $2 in RIVN stake at 30% discount to current price."
Shares of Ford closed at $20.43 yesterday.
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