Making its way onto the Zacks Rank #1 (Strong Buy) list last week, Ford Motor’s F stock lands the Bull of the Day.
Setting up a bullish pattern after moving above its 200-day moving average, Ford’s stock has now spiked +9% year to date and more upside could be ahead considering the auto giant’s lucrative valuation.
Improved Probability & P/E Discount
Ford had worked diligently to improve its profitability prior to the pandemic and this came to fruition once supply chain disruptions subsided with the company seeing multi-year EPS peaks of $2.01 per share last year. While a modest slowdown in the resurgence of Ford’s bottom line is expected, over the last 60 days, earnings estimate revisions are nicely up for both FY24 and FY25.
Furthermore, higher EPS estimates support the notion that Ford’s stock is still cheap trading at $13 and just 6.9X forward earnings. This is 58% below Ford’s decade-long high of 16.5X forward earnings and a slight discount to the median of 7.3X. Even better, Ford’s stock trades at a glaring bargain to its Zacks Automotive-Domestic Industry average of 15.3X and closer to its main competitor General Motors GM 7.6X.
P/S Discount
In terms of price to sales, Ford’s stock checks the valuation box as well with a P/S ratio of 0.31X which is roughly on par with General Motors’ 0.29X and firmly beneath the optimum level of less than 2X. With the industry average at 1.5X sales its noteworthy that Ford’s top line is expected to slightly increase this year to $166.3 billion compared to $165.99 billion in 2023.
EV Surge
Making Ford’s perceived discounts more lucrative is that its EV sales surged 27% last quarter to record highs with a total of 25,927 all-electric vehicles delivered. Driven by increasing demand for its Mustang Mack-E, F-150 Lightening, and E-Transit, this impressively defied expectations. To that point, many analysts are expecting a significant slowdown in the broader EV market with Tesla’s TSLA slowing sales growth making headlines.
Notably, the EV boost pushed Ford’s Q4 sales to $43.3 billion which beat estimates by 14% in early February while earnings of $0.29 per share crushed the Zacks Consensus of $0.12 a share by 141%. More astonishing, Ford said its EV sales soared 81% last month after delivering 6,368 units and this could certainly propel its Q1 resutls in April.
Bottom line
The recent surge in Ford’s stock may just be getting started considering its very attractive valuation and compelling EV expansion. Certainly, now appears to be an ideal time to buy as keeping Ford’s stock in the portfolio may be very rewarding this year.
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Making its way onto the Zacks Rank #1 (Strong Buy) list last week, Ford Motor’s F stock lands the Bull of the Day.
Setting up a bullish pattern after moving above its 200-day moving average, Ford’s stock has now spiked +9% year to date and more upside could be ahead considering the auto giant’s lucrative valuation.
Improved Probability & P/E Discount
Ford had worked diligently to improve its profitability prior to the pandemic and this came to fruition once supply chain disruptions subsided with the company seeing multi-year EPS peaks of $2.01 per share last year. While a modest slowdown in the resurgence of Ford’s bottom line is expected, over the last 60 days, earnings estimate revisions are nicely up for both FY24 and FY25.
Furthermore, higher EPS estimates support the notion that Ford’s stock is still cheap trading at $13 and just 6.9X forward earnings. This is 58% below Ford’s decade-long high of 16.5X forward earnings and a slight discount to the median of 7.3X. Even better, Ford’s stock trades at a glaring bargain to its Zacks Automotive-Domestic Industry average of 15.3X and closer to its main competitor General Motors GM 7.6X.
P/S Discount
In terms of price to sales, Ford’s stock checks the valuation box as well with a P/S ratio of 0.31X which is roughly on par with General Motors’ 0.29X and firmly beneath the optimum level of less than 2X. With the industry average at 1.5X sales its noteworthy that Ford’s top line is expected to slightly increase this year to $166.3 billion compared to $165.99 billion in 2023.
EV Surge
Making Ford’s perceived discounts more lucrative is that its EV sales surged 27% last quarter to record highs with a total of 25,927 all-electric vehicles delivered. Driven by increasing demand for its Mustang Mack-E, F-150 Lightening, and E-Transit, this impressively defied expectations. To that point, many analysts are expecting a significant slowdown in the broader EV market with Tesla’s TSLA slowing sales growth making headlines.
Notably, the EV boost pushed Ford’s Q4 sales to $43.3 billion which beat estimates by 14% in early February while earnings of $0.29 per share crushed the Zacks Consensus of $0.12 a share by 141%. More astonishing, Ford said its EV sales soared 81% last month after delivering 6,368 units and this could certainly propel its Q1 resutls in April.
Bottom line
The recent surge in Ford’s stock may just be getting started considering its very attractive valuation and compelling EV expansion. Certainly, now appears to be an ideal time to buy as keeping Ford’s stock in the portfolio may be very rewarding this year.
Only $1 to See All Zacks' Buys and Sells
We're not kidding.
Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.
Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 228 positions with double- and triple-digit gains in 2023 alone.
See Stocks Now >>
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