Why is investors' sentiment negative towards Ford Motor?

4:50 am ET, 23 Oct 2018

Ford Motor Company (F) shares are trading at $8.40. The company is announcing its quarterly earnings results on Wednesday after the market close. What's driving Ford stock price? What's Ford stock price forecast?

Ford Motors manufactures and sells cars, sports utility vehicles, and trucks.  Its automotive segment sells Ford and Lincoln vehicles. Morgan Stanley analyst recently downgraded the stock because of management's lack of transparency around decelerating profits.

Bulls argue that the stock is cheap and that the management team's restructuring efforts will soon start to pay off.  On the other hand, bearish investors believe that the trade war between the U.S. and China and management's inability to drive the profit up will eventually hamper stock price growth. Last quarter’s revenue fell 2.4% to $38.9 billion and earnings per share came at $0.27 compared to $0.56 for the same period last year.

Third-quarter results will be released after market close on October 24, 2018.  Analysts expect the company to earn $0.28 per share on revenue of $33.36 billion. 

What is the sentiment towards the Ford stock? Our technical analysis shows that:

  • The stock short-term sentiment (next 30 days) is trending negative;
  • The mid-term sentiment (3-6 months) is trending negative;
  • The long-term sentiment (9-12 months) is trending negative. 

Over the last month, Ford Motor Company (F) returned -7.49%.

Ford Motor Company (F) average analyst price target ($11.52) is 33.33% above its current price ($8.64).

For the latest price and information on Ford Motor Company, please visit Finstead and search for "F price" or "F news".

Elon Musk's Stock Options: Good or Bad for Tesla (TSLA)?

4:27 pm ET, 21 Mar 2018

Tesla's shares are up by 2% today, almost wiping off the losses for the year.

Elon Musk got what he asked for today: the shareholders approved to grant him stock options worth $2.6 Billion. This will be possible if Tesla manages to sustain its growth trajectory in the upcoming years.

Some of the Tesla's major investors are of the opinion that the award is necessary for gearing up the business. Per new plan, the options will be earned for the fulfillment of goals related to the market value, revenue, and earnings

In order for Musk to get all the options, Tesla's market cap has to be $650 Billion, which is more than Facebook’s market cap, and its revenue has to be more than P&G’s revenue. If Tesla succeeds in accomplishing those goals, Musk will get more than $50 Billion in equity grants.

Some critics hold a negative opinion towards this plan because it increases the company's expenses and dilutes the existing shareholders' stake. Musk's involvement in various other projects creates concerns around his lack of commitment to Tesla, but the award ensures he’d be in a driving seat for a decade.

Finstead doesn’t predict much of an upside for Tesla's price.  According to Finstead research, Tesla’s average price target is around $317.

Tesla’s valuation is negative because the company is not profitable. Trading shares of unprofitable companies is a highly speculative activity.

Tesla's Short Share of Float is higher than the average for the industry which means the share price is likely to be volatile. 

Over the last year, TSLA returned +18.57%. This return is higher than the Auto Manufacturers sector (8.97%), Consumer Goods industry (5.13%), and S&P 500 (14.47%) returns.

Tesla: What You Need To Know Prior To Earnings Results Today

1:08 pm ET, 07 Feb 2018

Tesla (NASDAQ: TSLA) is up 2% mid-day today ahead of its earnings report post market close.  Based on Finstead research, TSLA price target upside is -9.04% (visit Finstead and type "TSLA upside").   

Here are some things you should know about Tesla prior to the earnings release. 

Tesla is far away from a profitable company.  Per Elon Musk, profits can be realized only after Model 3 enters full-scale production. Investments in new vehicles development, technologies, and retail network build-out are the reasons for anticipating losses.

Production bottlenecks have led Tesla to miss its target of 1500 Model 3s in 2017.  Tesla's dependency on a single source to obtain components is limiting its production capacity.

The lithium-ion battery also remains a problem.

In order to meet the demand and sustain high growth, Tesla is investing in Model X and Model 3 development, Gigafactory construction, sales expansion, as well as building supercharger infrastructure.

Investors continue to be dubious regarding Tesla's SolarCity acquisition as they feel that the debt and cash flows of SolarCity would further deteriorate Tesla’s financial position. The acquisition of SolarCity has prompted 4 Tesla shareholders to file lawsuits against it, which will likely result in increased expenses (e.g., costs related to the indemnification of the directors) for Tesla.

The prohibition of direct sales by automakers and mandatory use of franchised dealers in certain U.S. states negatively impacts Tesla’s sales.  Tesla employs direct sales only.

Relatively high prices of Tesla models have resulted in low market penetration.  Fixed expenses such as marketing costs and R&D increases are becoming more pronounced because of the reduced sales volume. High operational expenses make Tesla look vulnerable compared to large-scale manufacturers such as General Motors and Ford.

The absence of sufficient charging points is a major hindrance for the potential buyers—and that impacts the international expansion of Tesla.

Over the last year, TSLA returned +32.55%.  This return is higher than Auto Manufacturers industry (20.38%), Consumer Goods industry (7.65%), and S&P 500 (15.30%) returns.

Ford Motor Company (F) Stock Guide

Updated at: 8:21 pm ET, 17 Sep 2020

Before we start: if you're looking for F stock price, you can quickly find it out by visiting Finny and typing "F quote". If you're looking for a quick scoop on F stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "F". You'll get all this info in one place. Or you can just type "F news" to get the latest stock news.

Looking to buy or sell Ford Motor Company (F)? Interested in getting the full scoop on F, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this F stock guide, we'll address key questions about F, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are F earnings?
2. What is F stock forecast (i.e., prediction)?
3. F buy or sell? What is F Finny Score?
4. What are the reasons to buy F? Why should I buy F stock?
5. What are the reasons to sell F? Why should I sell F stock?
6. What are F key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are F earnings?

F trailing 12-month earnings per share (EPS) is -$0.54.

Analyst Predictions

2. What is F stock forecast (i.e., prediction)?

Based on F analyst price targets, F stock forecast is $7.46 (for a year from now). That means the average analyst price target for F stock is $7.46. The prediction is based on 24 analyst estimates.

The low price target for F is $4.80, while the high price target is $12.00.

F analyst rating is Hold.

Analysis

3. F buy or sell? What is F Finny Score?

#{finnyScore:71}Our quantitative analysis shows 5 reasons to buy and 2 reasons to sell F, resulting in Finny Score of 71.

4. What are the reasons to buy F? Why should I buy F stock?

Here are the reasons to buy F stock:

  • Ford continues to pay a good dividend that is considered safe even in a down cycle. It is focusing its investments where it gets the best return, which is why exiting certain North American car segments is the right move for the company.
  • The revamped Fiesta, Focus, Fusion, and Taurus show that Ford can make quality, fuel-efficient vehicles to compete with Toyota and Honda.
  • Ford is ahead of GM in its use of common vehicle platforms.
  • Ford's processes are being streamlined and the leadership team is focused on removing bureaucracy.
  • F profitability is improving. The YoY profit margin change was 1.82 percentage points. See F profitability chart.
  • F Price/Book ratio is 0.88, which is low compared to its industry peers’ P/B ratios. See F forward Price/Book ratio chart.
  • F Price/Sales ratio is 0.21, which is low compared to its industry peers’ P/S ratios. See F forward Price/Sales ratio chart.
  • F PEG ratio (P/E adjusted for growth) is 1.22, which is low compared to its industry peers’ PEG ratios. See F PEG chart.
  • F cash to debt ratio is 0.22, higher than the average industry (0.06) and sector (0.13) cash to debt ratio. See F cash to debt chart.

5. What are the reasons to sell F? Why should I sell F stock?

Let's look at the reasons to sell F stock (i.e., the bear case):

  • The auto industry is very cyclical, and until recently, Detroit automakers had been losing significant U.S. market share to foreign automakers for years.
  • Long-term profitability could be hindered by unions, which traditionally have wanted their share of the pie. The nonunionized import automakers in the U.S. do not have this problem.
  • Ford's stock can sell off heavily on macroeconomic fears, even if the company itself is doing well. Furthermore, it takes significant investment to fund growth in the auto industry, which limits potential margin expansion.
  • F stock price ($7.28) is close to the 52-week high ($7.59). Perhaps now is a good time to sell? See F price chart.
  • F quarterly revenue growth was -50.10%, lower than the industry and sector average revenue growth (0.03% and 0.78%, respectively). See F revenue growth chart.

Key Stats

6. What are F key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for F:

Metrics F
Price $6.67
Average Price Target / Upside $7.46 / 11.93%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Auto Manufacturers
Sector Consumer Cyclical
Number of Employees 199,000
Market Cap $27.17B
Forward P/E Ratio 9.76
Price/Book Ratio 0.21
Revenue (TTM) $130.4B
YoY Quarterly Revenue Growth -50.10%
Profit Margin -1.63%

If you liked this analysis, check out Stock Guides for other stocks.

Follow Us