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Ford’s Maverick in hybrid type, with 37 mpg mixed.
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Ford Motor
‘s fourth-quarter earnings, reported Thursday evening, came in a little light, and financial guidance for 2022 didn’t blow buyers away. The inventory was buying and selling decrease
F
riday, and it could possibly be a tricky day for Ford bulls since Wall Street isn’t defending shares following the earnings miss.
Ford (ticker: F) inventory was at $17.92 in early buying and selling Friday, down 9.9%. The
S&P 500
is up about 0.4%, whereas the
Dow Jones Industrial Average
has fallen about 0.1%.
The firm reported 26 cents in adjusted per-share earnings. It posted $2 billion in working revenue from $37.7 billion in gross sales. Wall Street anticipated earnings of 45 cents a share together with $2.8 billion in working revenue from $34.5 billion in car gross sales.
Looking forward, Ford expects to earn about $12 billion in working revenue in 2022, proper consistent with analysts’ projections.
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Deutsche Bank analyst Emmanuel Rosner lowered his worth goal to $21 from $24. His drawback wasn’t with the fourth-quarter quantity. Rosner has issues that the 2022 steerage is aggressive. Ford Chief Financial Officer John Lawler mentioned that he expects higher efficiency within the second half of 2022 as extra semiconductor provide comes on-line.
Global automotive manufacturing has been constrained for a couple of yr by an absence of chips. Projecting second-half 2022 enchancment in provide places Ford susceptible to disappointing once more sooner or later this yr.
Rosner charges Ford inventory at Hold, as does RBC analyst Joseph Spak, who took his worth goal to $22 from $26. He requested “are Ford earnings capped by the BEV transition?” in a report Thursday. (BEV is brief for battery-electric car.)
“It was refreshing to hear how CEO [Jim] Farley talked about BEVs needing a completely different business and mindset vs. ICE when it comes to go- to-market, product development, procurement, talent, etc,” wrote Spak. (ICE is brief for inner combustion engine.)
Spak helps the strategic route, however wrote that working revenue margins through the transition may prime out at about 8%. What’s extra, he wrote that capital spending must rise. Those are two headwinds for earnings, and doubtlessly for the inventory, in response to the analyst.
Not everyone seems to be as apprehensive as Spak and Rosner. “Lower-than-expected volume in North America related to the ongoing [semiconductor] shortage and higher commodity costs largely accounted for the miss,” wrote Benchmark analyst Mike Ward in a Friday report. “As volume recovers, we expect a recovery in working capital items and a positive impact on cash balances.”
Ward lowered his 2022 earnings estimate as a result of ongoing semiconductor scarcity, however he left his numbers for 2023 unchanged. Ward maintained a Buy ranking on Ford inventory with a $29 worth goal.
Ward is within the minority although. Just lower than half of all analysts overlaying Ford price the inventory at Buy. The common Buy-rating ratio for shares within the S&P 500 is about 58%.
The common analyst worth goal for Ford inventory dropped to $19.90 from $20.60 after earnings.
Write to Al Root at allen.root@dowjones.com