Ford Motor Company (NYSE:F) gave up some of the gains from Wednesday and Thursday after its investor day. The automaker hit some things out of the park but missed expectations on other things. Overall, it seems investors were happy with what they saw, although the stock fell into the red today. Q1 2021 hedge fund […]
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Ford Motor Company (NYSE:F) gave up some of the gains from Wednesday and Thursday after its investor day. The automaker hit some things out of the park but missed expectations on other things. Overall, it seems investors were happy with what they saw, although the stock fell into the red today.
Q1 2021 hedge fund letters, conferences and more
Ford reveals Ford+ plan
Wednesday brought CEO Jim Farley’s first investor day at the helm of Ford. According to CNBC, the automaker’s plan aims to boost profits and expand aggressively into new high-tech segments. Executives also set out forecasts for electric vehicle sales, profits and other financial targets that investors can use to track Ford’s progress.
RBC Capital Markets analyst Joseph Spak upgraded Ford to Outperform in a note on Thursday, saying he feels “much better about the more cohesive strategy as Ford is focusing on their strengths.” Barclays analyst Brian Johnson said the Ford+ plan “answers most investor concerns,” referring to the automaker’s strategy for electric vehicles and margin improvements.
However, Ford didn’t address every issue that analysts wanted to hear about. Some topics the automaker ignored include more details on its upcoming EV lineup, autonomous vehicles and dividend payments.
Here’s what analysts liked about the Ford+ plan
Ford forecasts an adjusted profit margin of 8% before interest and taxes in 2023, which is early than most analysts expected. The last two CEOs, Jim Hackett and Mark Fields, promised that but never delivered.
Ford also expects to boost its commercial revenue to $45 billion by 2025 from $27 billion in 2019, including hardware and adjacent and new services. It will also create Ford Pro, a new vehicle services and distribution business focused on commercial and government customers.
Ford aims to surpass Tesla in sales of vehicles capable of major remote updates by July 2022 and expand it to 33 million vehicles that can take over-the-air updates by 2028. The automaker is also working on new battery technologies and projects that its battery cells will cost less than $100 per kilowatt-hour by the middle of the decade and $80 per kilowatt-hour by the end of the decade.
Here’s what was missing
One thing Ford didn’t do was give a timeframe for when it aims to go all-electric by. General Motors Company (NYSE:GM) is aiming for 2035, but Ford expects 40% of its global sales to be electric vehicles by 2030 after an increased $30 billion investment in electrification technologies.
Ford is building a new EV platform for “rugged SUVs” and electric versions of the Explorer and Lincoln Aviator. Some believe the automaker could build an electric version of its Bronco SUV. Ford has 70,000 reservations for its F-150 Lightning, which is lagging behind Tesla’s Cybertruck, which has been available for much longer.
Analysts were disappointed by the lack of detail on Ford’s plans for autonomous vehicles and management’s remark that they plan to “reinstate the dividend as soon as practical.”
Ford is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders’ families.