Even some of the manufacturers hardest hit by the global semiconductor shortage stand a chance of redemption. Unfortunately for automakers, just as economies came back to life, they were faced with another global crisis. The Ford Motor Co. (f) was one of the manufacturers most affected, but that could also mean the future will look great in comparison. (To see Ford stock charts on TipRanks)
Ford’s quarterly results and outlook for June were discussed by Michael Ward of Benchmark Co., who wrote that the company beat Wall Street’s earnings consensus and allayed deficit concerns.
Ward reiterated a buy recommendation for the stock and set a new price target of $18. This target is an upgrade from its previous $16, and now reflects a potential 12-month increase rate of 29.40%.
The five-star analyst explained that despite Ford’s positive earnings, they were still lower than the previous quarter. Sales from North America and Ford Motor Credit (Ford’s financial services company) contributed to the gains, supported by restructuring in South America and elsewhere.
Regarding the chip shortage, Ward said Ford was able to cut costs and “prioritize the mix to keep income positive”. As of now, the analyst believes the problem will recover, or at least lessen in severity. Chip replenishment could take place in the second half of FY21, which could represent strong upside potential for a hard-hit company like Ford.
The improving global market is driving production to gain momentum, with Ford seeing strong orders for many of its new products, including the all-electric “Lightning” pickup.
On TipRanks, F has a consensus among Moderate Buy analysts, based on 8 Buy and 5 Hold ratings and 1 Sell rating. The average Ford price target is $16.24, suggesting a 12-month upside potential of 16.75%. Ford closed trading Monday at a price of $13.91 a share.
Disclaimer: The opinions expressed in this article are those of the featured analyst only. The content is for informational purposes only. It is very important to do your own analysis before making any investment.