The stakes are high for Ford’s new F-150 Lightning.
Courtesy Ford
The Ford F-150 Lightning electric pickup truck is one of the most significant vehicle launches in U.S. history. Americans love trucks, and the traditional F-150 has been the bestselling vehicle in America for 40-plus years.
A huge question for Ford Motor investors is whether customers will buy the Lightning. The answer from one brokerage firm, after driving a couple, is a “resounding” yes.
Evercore ISI analysts Chris McNally and James West recently took clients on a test drive. The group drove the base F-150 Lightning model, which starts at about $40,000 excluding any incentives, and the Platinum edition that can run into six figures.
“We were impressed,” wrote McNally. “Not just by the Lightning, but also learning more about the behind-the-scenes tectonic shift in Blue Oval culture taking place over the past few years.”
Ford (ticker: F) is working hard to win in EVs. The company is reorganizing itself, shifting form a regional focus to business units centered on EVs, traditional cars, and commercial customers.
As for the test drive, McNally didn’t include many details about the actual ride. (Pro reviews are positive, and Barron’s has test driven an F-150 Lightning as well. The ride is smooth and acceleration impressive.) He did point out the many features and benefits, such as backup power for a home.
“The Lightning has a brand new chassis …and is optimized for EV performance while clearly retaining the same F-150 platform body which drives (1) scale and (2) ability to launch all derivative configurations,” added the analyst.
He came away convinced that customers will buy the vehicle, which is “existentially important” for the company. Ford has received 200,000 reservations and has plans for run rate production of 150,000 a year by the end of 2023. (Ford shut reservations off after 200,000.)
McNally appears to like the vehicle, but he doesn’t rate Ford stock a Buy. He has a Hold rating on shares, but his price target is $18, about 33% above where shares are trading.
That gap exists because Ford shares have been badly beaten up in recent months, sliding about 25% over the past three months. General Motors (GM) stock, in comparison, is off about 22%. Investors have become concerned that profit margins will be squeezed amid rising costs. What’s more, demand for new vehicles could wane if the rising interest rate slow the economy.
Ford stock is down another 1.1% in premarket trading. The market is off as well. S&P 500 and Dow Jones Industrial Average futures are down about 0.7% and 0.5%, respectively.
Write to Al Root at [email protected]
