We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Zacks Rank #5 (Strong Sell) stock Ford Motor Company ((F - Free Report) ), established by Henry Ford in 1903, is an American automotive manufacturer headquartered in Dearborn, Michigan. Being one of the world’s leading automakers, Ford provides a vast product portfolio of cars, trucks, SUVs, and commercial vehicles, including its luxury Lincoln brand and electric vehicles (EVs).
Ford Earnings Miss Amid EV Weakness, Competition
Checkered EPS Surprise History
Ford’s recent earnings history has been checkered, with some quarters beating, and some missing badly. Presently, the July quarter is in control. F shares stumbled more than 18% on volume turnover nearly four times the norm, after the automaker missed Zacks Consensus estimates by a wide margin of 26.56%. Conversely, fellow legacy automaker General Motors ((GM - Free Report) ) has beaten Wall Street’s earnings estimates.
Image Source: Zacks Investment Research
EV Market Slows, Competition is Fierce
An integral reason Ford missed earnings estimates is weakness in its EV segment. Ford has been forced to scale down its EV production amid slowing EV demand. Meanwhile, though EV demand will likely pick up eventually, Tesla ((TSLA - Free Report) ) dominates the market by a significant margin. Further, many customers who want to avoid diving dive straight into an EV are opting for hybrids from Toyota Motors ((TM - Free Report) ), leaving Ford out in the cold.
Ford’s relative weakness is illustrated not only in its faltering fundamentals but also in its share price. Tesla and GM are up 74.80% and 18.90% over the past year, respectively, while Ford lags far behind, down 29%.
Image Source: Zacks Investment Research
Ford Faces Quality Issues
Ford’s struggle to manage warranty expenses has been another sore spot for the automaker. Quality issues in several models from 2016-2021 have led to an $800 million increase in warranty costs. Though management intends to address these issues, they have communicated to shareholders that the problems may not be resolved for more than a year, at the very least. In other words, the warranty issues will cause a bearish overhang in the stock for the foreseeable future.
Tariff Concerns
Ford CEO voiced concerns about tariffs on CNBC yesterday, saying,“So far, what we’re seeing is a lot of cost and a lot of chaos.If you look at the tariffs, let’s be real honest, long term, a 25% tariff across the Mexico and Canadian border will blow a hole in the US auto industry that we have never seen.”
Bottom Line
Despite its storied history, Ford Motor faces significant headwinds, including missed earnings, slowing EV demand, and increased competition from Tesla and other automakers. Additionally, persistent quality issues will likely weigh on the stock over the coming months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bear of the Day: Ford Motor Company (F)
Ford Company Overview
Zacks Rank #5 (Strong Sell) stock Ford Motor Company ((F - Free Report) ), established by Henry Ford in 1903, is an American automotive manufacturer headquartered in Dearborn, Michigan. Being one of the world’s leading automakers, Ford provides a vast product portfolio of cars, trucks, SUVs, and commercial vehicles, including its luxury Lincoln brand and electric vehicles (EVs).
Ford Earnings Miss Amid EV Weakness, Competition
Checkered EPS Surprise History
Ford’s recent earnings history has been checkered, with some quarters beating, and some missing badly. Presently, the July quarter is in control. F shares stumbled more than 18% on volume turnover nearly four times the norm, after the automaker missed Zacks Consensus estimates by a wide margin of 26.56%. Conversely, fellow legacy automaker General Motors ((GM - Free Report) ) has beaten Wall Street’s earnings estimates.
Image Source: Zacks Investment Research
EV Market Slows, Competition is Fierce
An integral reason Ford missed earnings estimates is weakness in its EV segment. Ford has been forced to scale down its EV production amid slowing EV demand. Meanwhile, though EV demand will likely pick up eventually, Tesla ((TSLA - Free Report) ) dominates the market by a significant margin. Further, many customers who want to avoid diving dive straight into an EV are opting for hybrids from Toyota Motors ((TM - Free Report) ), leaving Ford out in the cold.
Ford’s relative weakness is illustrated not only in its faltering fundamentals but also in its share price. Tesla and GM are up 74.80% and 18.90% over the past year, respectively, while Ford lags far behind, down 29%.
Image Source: Zacks Investment Research
Ford Faces Quality Issues
Ford’s struggle to manage warranty expenses has been another sore spot for the automaker. Quality issues in several models from 2016-2021 have led to an $800 million increase in warranty costs. Though management intends to address these issues, they have communicated to shareholders that the problems may not be resolved for more than a year, at the very least. In other words, the warranty issues will cause a bearish overhang in the stock for the foreseeable future.
Tariff Concerns
Ford CEO voiced concerns about tariffs on CNBC yesterday, saying,“So far, what we’re seeing is a lot of cost and a lot of chaos.If you look at the tariffs, let’s be real honest, long term, a 25% tariff across the Mexico and Canadian border will blow a hole in the US auto industry that we have never seen.”
Bottom Line
Despite its storied history, Ford Motor faces significant headwinds, including missed earnings, slowing EV demand, and increased competition from Tesla and other automakers. Additionally, persistent quality issues will likely weigh on the stock over the coming months.