Ford Motor Co. stock rose on Friday, with Wall Street overlooking a quarterly loss of nearly $3 billion and a sales miss to focus on the auto maker’s plans to invest more in electric and self-driving cars.
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“We were very encouraged” by these, Emmanuel Rosner with Deutsche Bank said in his note Friday.
The company’s operating performance in the second half of 2020 and the 2021 guidance “suggest to us the company may be turning a corner with its profitability and cash generation, benefiting from new and refreshed products, strong pricing and mix, and global cost reductions and efficiencies,” he said.
Ford’s plan to invest in EVs and self-driving cars rose to $29 billion, including $22 billion for EVs through 2025. That shows that Chief Executive Jim Farley “is truly accelerating the company’s transformation towards an electrified and connected future.”
Read: Electric vehicles will make up a bigger slice of U.S. retail auto sales, Edmunds says
Ford is taking “bolder and more decisive action on EV (and AV),” Joseph Spak at RBC Capital said in his note. Ford “is ‘pulling a GM’ and stepping up the investment. This is absolutely necessary.”
Ford’s valuation of about $45 billion has been eclipsed by Tesla Inc.’s TSLA,
One unifying concern with Ford, however, was news that the production of the new F-150 pickup truck, the No. 1 vehicle sold in the U.S. for decades running and one the company’s crown jewels, was being hampered by a chip shortage. The company temporarily has cut back on factory shifts.
Ford guided for a 2021 adjusted earnings before interest and taxes around $7.1 billion and $8.1 billion, which was “decent” considering the chip shortage, Adam Jonas of Morgan Stanley said in a note.
Shares of Ford have earned 40% in the past 12 months, compared with gains around 17% for the S&P 500 index. SPX,
