Wall Street analysts are divided on Ford Motor's prospects after the company presented a less-than-expected outlook for 2025. While some analysts remain optimistic about Ford's long-term growth potential, others are more cautious, citing concerns about the company's near-term performance and free cash flow guidance. Ford shares declined in premarket trading following the release of the company's fourth-quarter earnings and 2025 guidance.
Wall Street analysts are expressing skepticism about Ford Motor's near-term prospects after the company presented a less-than-anticipated outlook for the current year. Despite exceeding Wall Street's earnings and revenue expectations for the fourth quarter, Ford 's guidance for 2025, which aligned with or fell below many analysts' estimates, predicts challenges stemming from market factors.
The company's forecast anticipates a $1 billion reduction in material and warranty costs compared to the previous year, however, it does not factor in potential difficulties related to policies or tariffs imposed by the new presidential administration. These factors have been a significant concern for automakers' supply chains.Ford anticipates a weaker first half of 2025 compared to the latter part. Following the release of these results, Ford shares declined by 6.4% in premarket trading on Thursday. Here's a summary of what analysts had to say:Goldman Sachs reiterated its buy rating and a $11 price target. Analyst Mark Delaney's price target indicates a potential upside of 9.9%. He remains optimistic about Ford, pointing out the automaker's progress in cost-saving initiatives and the potential benefits for Ford's 'Pro' fleet businesses from the 2026 Ford Ranger Super Duty, scheduled for launch in 2026. Delaney stated, 'The 2025 guide was lower than we had expected driven primarily by lower volumes and to a lesser extent FX. Our view that a solid US auto cycle, Pro, and software & services mix would result in relatively flattish EBIT was wrong. ... Despite the weaker guide, we maintain our Buy rating on the stock as we expect profits to pick up from the lower 1H25 base.' Bernstein maintained its market perform rating. Analyst Daniel Roeska's $10.70 price target suggests a potential upside of about 6.9%. Roeska noted that Ford reported a beat on Q4 earnings driven by its Blue segment, but planned production shutdowns in Q1 and market headwinds present a challenging start for 2025. He added, 'The company expects first quarter 2025 adjusted EBIT to be roughly breakeven due to lower wholesales and unfavorable mix, including launch activity at major U.S. assembly plants. This is inline with our forecast, but already provides a material headwind to 2025.' Bank of America maintained its buy rating but lowered its price target to $15.50 from $19. Analyst John Murphy adjusted his price target based on fourth-quarter results and 2025 guidance. However, his new target still implies a potential jump of over 54% from Ford's latest closing price. Murphy stated, 'Despite lighter results ahead in 1H:25, management continued to paint a positive picture. Management called out Ford's portfolio strength in its core truck market, especially in Pro, which is Core to the company and a priority for capital allocation. On top of the Core business, management reiterated potential growth opportunities in software and services, which continue to progress. Although 1H:25 is hit by a material changeover at the Kentucky Truck plant, we expect product cadence combined with management's focus will support better profits and progress in 2H25+. Therefore, we reiterate our Buy rating.' Wells Fargo maintained its underweight rating and $8 price target. Analyst Colin Langan expressed concerns about Ford's free cash flow guidance, deeming it 'conspicuously weak,' and stated that 'we don't think optically lower implied y/y guide is conservative enough.' Langan's price target suggests roughly a 20% downside ahead for shares. He added, 'There isn't much to hang your hat on in 2025. EBIT is 2H weighted & relies on $1B of cost redux related to lower warranty & mat costs ... Overall, we also see limited near-term catalysts, as normalization of new vehicle pricing and higher input costs likely offset expected volume increases.
FORD STOCK ANALYSTS EARNINGS OUTLOOK 2025 GUIDANCE MARKET HEADWINDS AUTO INDUSTRY
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