Is Ford Stock A Buy Now? Automaker Falls Below Key Level After EV-Fueled Surge

3 months ago 26
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Ford Motor (F) began the caller decennary with optimism arsenic it emerged from a cardinal firm redesign to vie successful the epoch of astute vehicles and cleanable energy. The automaker is investing heavy successful caller technologies to support gait with competitors successful the markets for autonomous vehicles, thrust sharing and electric cars. But is Ford banal a bargain now?

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The unveiling of the Mustang Mach-E successful November 2019 was a cardinal milestone successful the company's pivot toward what it called "the integer future." The Ford Mustang Mach-E, an all-electric crossover, precocious made its commercialized debut successful the U.S., with European deliveries imminent. Ford is opening accumulation of the Mach-E, a rival to the Tesla (TSLA) Model Y, successful China arsenic well. And Ford didn't halt astatine electrification with a crossover — it's present debuting an electrical mentation of the F-150.

This caller aboriginal besides includes a pivotal tech concern with Alphabet (GOOGL)-owned Google and a slew of different caller conveyance launches. Among them: a resurrected Ford Bronco brand. Additional strategical partnerships include Volkswagen (VWAGY), Rivian and Mahindra to fortify Ford's planetary presence.

After a prolonged downtrend, Ford banal has been connected a large tally from 202o lows, on with adjacent General Motors (GM). If you're reasoning astir buying shares of Ford, it's cardinal to analyse the cardinal and method representation first.

Mustang Mach-E Named EV Of The Year

Ford snagged Car and Driver's 2021 EV of the Year award. The magazine, which publishes an yearly database of champion autos, singled retired the Mustang Mach-E arsenic its apical prime successful the electric car category.

"For caller EV converts, piloting a Mach-E isn't truthful antithetic from driving a gas-burning SUV," said the July 7 reappraisal from Car and Driver. "It's the close car to bring drivers on during this watershed infinitesimal arsenic EVs modulation from niche alternate to caller normal."

Though the Ford Mach-E took apical honors implicit rival Tesla, Ford banal fell contempt the news. Shares are present pulling backmost toward their 50-day moving average.

Ford Puts More Money Into EVs

Ford outlined plans to summation investments successful electrical vehicles astatine its yearly capitalist time connected May 26. The automaker besides expects costs of EV batteries to driblet sharply. Ford banal rose.

Spending related to EV initiatives is expected to turn to much than $30 cardinal by 2025. The car institution antecedently planned an concern of $22 cardinal connected EV development. Ford expects astir 40% of its planetary conveyance measurement to beryllium electrical by 2030.

"This is our biggest accidental for maturation and worth instauration since Henry Ford started to standard the Model T, and we're grabbing it with some hands," CEO Jim Farley told investors connected May 26.

Acquires Battery Charging Startup

Ford connected June 17 announced the acquisition of Electriphi. The California-based startup provides battery-management and charging solutions. The woody is expected to boost Ford's capabilities to make artillery charging and absorption services arsenic it ramps up electrification efforts. Ford banal fell slightly.

"With Electriphi's existing precocious exertion IP successful the Ford Pro electrical vehicles and services portfolio, we volition heighten the acquisition for commercialized customers and beryllium a single-source solution for fleet-depot charging," Ford Pro CEO Ted Cannis said successful a June 17 statement.

Ford Pro projects the charging depot conception could turn to 600,000 vehicles by 2030 and bring an further $1 cardinal successful gross successful that aforesaid clip frame.

Ford did not disclose however overmuch it's paying for the San Francisco-based company. But executives accidental the acquisition is portion of Ford's $30 cardinal concern successful electrification efforts. The woody is expected to adjacent by the extremity of June.

Ford Launches Lightning F-150 As Biden Pushes EVs

Ford connected May 19 officially debuted its electrical pickup truck, the F-150 Lightning. Just a time earlier, President Joe Biden visited a Ford works successful Michigan to tout his $174 cardinal electric-vehicle program and instrumentality Ford's electrical motortruck for a trial drive.

Shares surged 13% for the week, signaling investors are bullish astir the income imaginable for the newest mentation of the fashionable pickup model.

"Every truthful often, a caller conveyance comes on that disrupts the presumption quo and changes the crippled … Model T, Mustang, Prius, Model 3. Now comes the F-150 Lightning," CEO Farley said successful a May 10 quality release.

Production of the caller F-150 won't statesman until 2022. The caller exemplary volition vie amid a increasing marketplace lineup of electrical pickups. In summation to Tesla's (TSLA) heavy publicized Cybertruck, GMC and Chevy besides person announced plans to merchandise electrical versions of the Hummer and Silverado motortruck models, respectively.

A Rivian EV pickup launches successful June with GM's Hummer EV retired aboriginal this year. The Tesla Cybertruck is expected to motorboat sometime successful 2022, but it's unclear when.

Ford Stock Earnings

Earnings are starting to crook around, but Ford is hitting a stumbling block. A planetary spot shortage is forcing the automaker to trim its second-quarter accumulation by half. Ford banal crumbled 9.4% connected that quality successful precocious April, contempt the institution reporting Q1 earnings and gross that crushed estimates.

Wall Street expected Ford to study net of 14 cents a stock connected gross of $32.63 billion. Yet beardown net were offset by quality that Ford volition chopped its Q2 accumulation levels by 50%. Current CEO James Farley hinted that the spot shortage volition get worse earlier the outlook improves.

"We judge our 2nd 4th volition beryllium the trough for this year," Farley said connected the net call. "We person enactment to bash to get our manufacture footprint backmost to firing connected each cylinders."

Ford's adjacent quarterly study is owed connected July 28.

Will Chip Shortage Force Redesign?

Part of assessing that manufacture footprint includes a imaginable car constituent redesign to displacement to much accessible chips. A planetary shortage has hamstrung the car industry, forcing cutbacks successful accumulation quotas. Ford is curtailing accumulation by fractional successful Q2 and said successful past month's net that the contented could outgo the automaker $2.6 cardinal this year.

During Ford's annual shareholder meeting connected May 13, CEO Farley said the institution is weighing aboriginal strategies to woody with spot woes. Some of these strategies see redesigning car components to enactment with much accessible chips and cutting proviso deals straight with spot foundries.

Ford EV Sales Set New Record

Ford's absorption connected EVs is translating to accrued sales. Electric-car sales surged 117% to a first-half grounds successful June. The Mustang Mach-E outsold the gas-powered Mustang for the archetypal time, notching 12,975 full sales. F-150 PowerBoost hybrid income totaled 17,039 vehicles.

Reservations for the caller afloat electrical F-150 deed the 100,000 mark, according to July 2 totals released by the automaker.

Record EV income proceed a affirmative inclination for Ford, topping an all-time monthly grounds successful May. That month, the automaker saw electric-vehicle income summation 186% to deed a monthly full of 11,172 vehicles. Those numbers were boosted by the popularity of caller merchandise offerings similar the Mustang Mach-E and F-150 hybrid.

Google Partnership Lifts Ford Stock

Key tech partnerships are portion of Ford's strategy arsenic well. Ford banal gained 2.9% connected Feb. 1 aft CEO Farley announced the 117-year aged automaker is partnering with tech elephantine Google. The Michigan-based carmaker and Alphabet-owned institution volition signifier a caller collaborative radical called Team Upshift.

"We're going to leverage the endowment and assets of some companies to propulsion the boundaries of Ford's transformation," Ford Motor wrote successful a institution blog post. "This whitethorn see projects ranging from modernizing our plants done imaginativeness AI, processing caller retail experiences erstwhile buying a vehicle, creating caller ownership offers based connected connected conveyance data, and more."

In summation to the associated venture, the woody volition marque Google the preferred unreality work for the Detroit automaker.

New Ford CEO Takes The Helm

On Oct. 1, COO James Farley took the helm arsenic Ford's CEO. His tenure began with a shake-up of cardinal enactment roles. Ford announced Tim Stone is vacating his relation arsenic CFO. He replaced John Lawler, who precocious oversaw Ford's autonomous conveyance unit.

Along with Farley's caller presumption came a ramp-up successful Ford's intent to put much successful emerging technologies, including autonomous vehicles, electrical cars and software-as-a-service capabilities. Ford banal investors person welcomed the changes, with shares astir doubling from past October done aboriginal February.

Farley stepped successful aft disappointing results successful Hackett's three-year bid to reshape the automaker. The centerpiece of Hackett's tenure was an $11 cardinal restructuring plan. That program ran into large roadblocks erstwhile Ford botched the redesign and motorboat of its fashionable Explorer SUV successful 2019.

All successful all, Ford banal declined astir 60% during Hackett's clip arsenic CEO.

In summation to C-suite changes, Ford announced past July it was resurrecting its iconic enactment of Ford Bronco SUVs. Production of the caller Bronco lineup volition see two-door and four-door models, arsenic good arsenic a smaller Bronco Sport edition. Consumers tin present spot immoderate of the caller Bronco models, acceptable to deed showrooms successful May 2021, online.

Bronco Relaunch Part Of New Strategy

The relaunch of the Bronco SUV — which was discontinued successful 1996 — is portion of Ford's wide strategical inaugural to capitalize connected its iconic marque lineup to boost U.S. gross and earnings.

Ford President of the Americas & International Markets Group Kumar Galhotra told CNBC past July helium expects yearly portion income of the caller Ford Bronco bid to beryllium "in the hundreds of thousands." The Bronco SUV household is acceptable to straight vie against the fashionable Jeep marque owned by Fiat Chrysler (FCAU).

The revival of the fashionable Bronco conveyance models came conscionable weeks aft the Detroit-based car institution unveiled details of the latest mentation of its top-selling Ford F-150 pickup motortruck successful precocious June. The motortruck is the archetypal Ford conveyance to enactment over-the-air bundle updates, archetypal pioneered by Tesla (TSLA) successful 2012.

Ford Stock Fundamental Analysis

To find whether Ford banal is simply a bargain now, cardinal and method investigation is key.

The IBD Stock Checkup tool shows Ford banal has an IBD Composite Rating of 81 retired of a best-possible 99. The standing means Ford banal ranks comparatively good vs. each stocks, but not outstanding, successful presumption of the astir important cardinal and method stock-picking criteria.

Ford banal has an EPS Rating of 70 retired of 99, which compares quarterly and yearly earnings-per-share maturation with each different stocks. While that people could beryllium better, it has improved since the past quarterly report. Ford has a spotty net way record, with galore quarters of net declines implicit the past decade. But forward-looking estimates are pointing to growth.

The rankings spot the carmaker successful the No. 1 spot vs. its automotive manufacture peers. IBD's automaker radical is ranked dormant past astatine No. 197 retired of the 197 manufacture groups tracked by IBD. It's perfect to absorption connected apical stocks successful the apical quartile of IBD's groups.

Ford Stock Technical Analysis

Ford banal broke retired of a level basal successful precocious May, deed the 20% nett portion wrong 2 weeks and started pulling backmost successful an orderly fashion.

A rebound disconnected the 21-day exponential moving mean connected June 21 was a buying accidental for existing shareholders to adhd to their positions. Ideally, investors would privation to spot a beardown rebound disconnected that cardinal enactment level and bargain into strength.

However, shares are starting to falter, falling beneath their 21-day moving average. A interruption beneath that level perchance is simply a motion of a quality alteration for the stock. Investors who bought shares disconnected the June 21 rebound, and the late-May breakout, should see locking successful profits.

In precocious May and aboriginal June, Ford banal revved up alongside the debut of its EV F-150. News that the automaker is going to enactment much wealth down EV accumulation sent shares 8% higher connected May 26. This determination pushed Ford banal supra a 13.72 bargain point.

Another 7% leap connected June 3 enactment Ford banal 20% supra its pivot point, triggering the eight-week clasp rule for investors who initiated positions astatine that 13.72 bargain point. Such almighty moves whitethorn awesome that the banal has a amended accidental to go a large winner.

When a banal rises that quickly, immoderate investors whitethorn determine to instrumentality profits. This tin origin a banal to propulsion backmost — sometimes sharply. The eight-week clasp rule is meant to assistance investors clasp done this imaginable downdraft until a wide merchantability awesome emerges. One of those merchantability signals tin beryllium a interruption beneath the 21-day line.

Ford Added To Leaderboard

Ford banal was added to IBD's Leaderboard database connected May 26 arsenic it broke retired of a level base. Shares are up 74% connected the twelvemonth arsenic the institution shifts to greater EV production.

Ford's breakout successful precocious May came aft a two-day pullback. Shares rebounded powerfully supra the 50-day line, with a summation of 3% connected May 20 followed by a 7% leap connected May 21. This almighty determination broke a astir two-month downtrend successful Ford stock.

However, continued interest implicit a planetary spot shortage coincided with a pullback for Ford stock. A interruption beneath the 21-day enactment is simply a informing sign.

It's besides important to see Ford's comparative terms performance. Ford's comparative spot enactment — which measures a stock's terms show vs. the S&P 500 — has surpassed its short-term highest successful mid-March. IBD's probe shows that stocks with starring comparative spot lines arsenic they wide due bargain points are typically the biggest winners successful the market. That underscores the bullish enactment successful Ford banal arsenic of late.

Ford Stock: A Buy Right Now?

On a monthly chart, Ford banal is breaking supra its semipermanent downtrend going backmost to 1999. Looking astatine the play chart, shares person made a large determination disconnected 2020 lows. Ford broke retired of a level basal successful precocious May but it's present giving backmost overmuch of its gains.

As for the fundamentals, Ford income and profits are rebounding. The institution is moving much into electrical vehicles, too. However, spot shortages are weighing connected Ford and the full car industry.

Bottom line: Ford banal is not a bargain close now. Shares are breaking beneath their 21-day moving average. That's triggering a merchantability signal. Ford is present investigating enactment astatine its 10-week moving average. A beardown rebound from that level perchance would marque the banal actionable again.

To find the champion stocks to bargain and watch, cheque retired IBD's Stock Lists page. More banal ideas tin beryllium recovered connected our Leaderboard and MarketSmith platforms.

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