In May, Ford jumped 44% as investors wagered that the expansion of artificial intelligence infrastructure would lift its fortunes. Then the sizzle cooled. With few fresh updates on customers or capacity, the stock has slid about a third from its spring top.
Since Labor Day, it has closed down in 14 of 20 sessions and has fallen 17% in the last four weeks, as excitement around Ford's battery-storage unit waned. Higher oil prices, rising rates, and car affordability worries piled on. October added another ding when Ford reported a year-over-year drop in third-quarter vehicle deliveries.
A supplier snag in September also crimped F-Series output. Chief Executive Officer Jim Farley said manufacturing is "on track" for the year's final three months. UBS's Joseph Spak cautioned that "containable does not mean 'make-up-able,'" while Citi's Michael Ward called the production shortfall "a setback and a negative heading into 3Q earnings."
Despite the slide, Wall Street has not turned bearish. The average price target has climbed 16% since May, and Bloomberg data shows the gap between Ford's stock and analysts' targets is the widest in three years. The gap last reached a similar extreme in October 2023, following a six-week US autoworkers strike that led Ford to pull its profit guidance.
Not one of the 23 analysts that Bloomberg tracks recommends selling. The final sell-equivalent call went away last month, coinciding with Wells Fargo ending coverage of 17 auto stocks after an analyst left.
Peers tell a different price story. General Motors, which also has no negative ratings, set an all-time high in July on robust earnings and is down 11% from that peak, whereas Ford has declined by almost double that over the same period. As Bloomberg Intelligence's Eric Varghese put it, "research is taking a longer-term view of Ford's earnings recovery, while the market is assigning less value to that recovery because of execution uncertainty."
Analyst conviction and share prices often move in opposite directions. Market Briefs covers the auto trade free every morning.
Ford's third-quarter report later this month is the near-term catalyst. Bloomberg consensus projects 42 cents in adjusted EPS, which would still be 7.8% under the prior-year quarter if achieved. BNP Paribas analyst James Picariello anticipates a broadly sturdy season for automakers, but says that after the supplier snag, Ford would require a "heroic" bounce-back in F-Series output to hit its full-year target. "This September downtime dynamic does remove the prospect for Ford to raise its full-year guide," he added.
On the sentiment front, UBS's Spak has a bullish recommendation, while Citi's Ward upgraded Ford to buy in July and set a Street-high $20 target.
Prices have slumped while targets have climbed, setting up a classic split. Eric Diton of The Wealth Alliance put it plainly: "I believe the market before the analysts," adding, "I see no reason to rush into the stock - I would rather pay more and see better fundamentals." A Ford representative did not respond to a request for comment immediately. For now, watch three things: softer deliveries, the September production hit, and a price-to-target gap that has not been this wide in three years, with third-quarter results next to show who is reading it right.
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