Southwest Airlines Co. and Sabre Corp. have finally reached an agreement after two years of discussions that will allow the companies to continue offering clients access to low fares and improved customer service in 2021.
Southwest Airlines Co. (LUV), which will celebrate its 50th anniversary this year has itself a goal to offer exemplary customer service by its 58,000 employees.
Sabre (SABR) is a software and technology company that serves a wide range of travel companies including airlines, hotels, and travel agencies. Sabre connects travel suppliers with buyers from around the globe and its technology platform manages more than $260 billion worth of global travel spend annually.
As part of the agreement, Southwest Airlines flights and services will be distributed through Sabre’s travel marketplace, promoting the airline's offerings to Sabre-connected agencies and other travel buyers.
Southwest Airilines Chief Commercial Officer, Andrew Watterson, said in a statement, "Providing our content in Sabre GDS with industry-standard capabilities has continued to be a top priority of our Customers. He added, “We are thrilled to come to terms that are mutually beneficial for our Customers and continue our long-standing partnership with Sabre.”
Southwest stock hit a multi-year low in May 2020, but improved investor sentiment and positive Covid-19 developments helped the stock recover much of its losses. However, shares still ended 2020 with a 15% decline. (See LUV stock analysis on TipRanks)
Last month, Deutsche Bank analyst Michael Linenberg downgraded the stock from a Buy to a Hold but raised his price target from $48 to $50 (7% upside potential).
Linenberg believes that airline stocks are at or near fair value based on 2022 valuations, suggesting that investors have already paid for two years of earnings growth. Meanwhile, the analyst remains bullish on the sector in the long-term.
Consensus among analysts is a Moderate Buy based on 9 Buys, 3 Holds and 1 Sell. The average price target of $53.08 suggests upside potential of around 14% over the next 12 months.
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Daimler said Thursday that it agreed to pay a $30 million penalty for failing to recall its vehicles in a timely manner and not complying with reporting requirements.
The US National Highway Traffic Safety Administration (NHTSA) released a consent order that includes both monetary and non-monetary provisions designed to improve Daimler’s (DDAIF) compliance and safety practices.
The terms of the consent order require Daimler to make an upfront payment of $10 million, an additional $5 million will be spent on specific safety enhancing projects and the remaining $15 million will be deferred and may become payable under specified circumstances.
Furthermore, Daimler will need to develop and implement an advanced data analytics program to improve its ability to detect and investigate potential safety defects.
IT systems will need to be improved and employees will need to be properly trained on the recall and reporting requirements of the Vehicle Safety Act, so that regular reporting of safety issues to the NHTSA is conducted accurately.
“Safety is NHTSA’s top priority,” said NHTSA Deputy Administrator James Owens. “It’s critical that manufacturers appropriately recognize the urgency of their safety recall responsibilities and provide timely and candid information to the agency about all safety issues.” (See DDAIF stock analysis on TipRanks)
Morgan Stanley analyst Harald Hendrikse this week reiterated a Buy rating on the stock and set a price target of $73.85. This implies upside potential of around 5% from current levels.
Hendrikse believes that a fundamental business recovery in the automotive sector has already been priced in, but that an expected surge in sales will be an individual driver for Daimler.
Overall, consensus among analysts is a Moderate Buy based on 12 Buys, 8 Holds and 1 Sell. The average price target of $73.22 suggests upside potential of around 4% over the next 12 months.
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Shares of Tribune Publishing surged more than 7% after its largest shareholder Alden Global Capital made an offer to take full control of the newspaper chain.
According to an SEC filing on Dec. 31, Tribune Publishing’s (TBCO) board of directors on Dec. 14 received a non-binding proposal & inquiry letter from hedge fund Alden Global to buy the company at a price of $14.25 per share. The purchase price, which values Tribune Publishing at about $520.6 million, represents an 11% premium to the stock's closing price on Wednesday of $12.79. Shares closed at $13.70 on Dec. 31. Tribune added that Alden did not propose any specific structure for the transaction.
The hedge fund took a 31.6% stake in Tribune Publishing in 2019, making it the publisher’s largest shareholder. Headquartered in Chicago, the publisher operates a number of media outlets, including The Chicago Tribune, The New York Daily News and The Baltimore Sun.
Following the proposal letter, Tribune announced that it has appointed a special committee of its board of directors to act on behalf of the company to deal with the acquisition proposal made by Alden Global. The special committee consists of three independent board members. The committee has hired Lazard as its financial advisor.
Separately, Tribune Publishing announced the closure of the sale of its majority stake in BestReviews to Nexstar Media Group for a gross purchase price of $160 million in cash, plus a working capital adjustment of $9.4 million. BestReviews was owned 60% by Tribune and 40% by its founders, BR Holding Company, Inc.
Noble Financial analyst Michael Kupinski on Dec. 17 put out a review on TBCO, rating the stock with a Buy rating and a price target of $17.50 (28% upside potential).
“We believe that upside revenue and cash flow surprises and increasing contributions from its Digital businesses would be among the key catalysts toward higher stock valuations,” Kupinski wrote in a note to investors. “We would not rule out, however, other transformative acquisitions or return of capital strategies.” (See TBCO stock analysis on TipRanks)
The analyst said that combined with the proceeds from the BestReviews sale and Tribune’s $121.3 million in cash as of September 30, the company would have $210 million in cash, or $5.75 per share.
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Microsoft, a customer of SolarWinds, disclosed that hackers viewed its source code in the cyberattack that impacted Orion platform users.
The cyberattack which was detected in December 2020 impacted several US government agencies and companies using SolarWinds’ Orion platform, in which hackers inserted a malware.
In a blog providing an update on Microsoft’s (MSFT) ongoing internal investigation into the cyberattack (which the company calls Solorigate), the company revealed that it detected unusual activity in a small number of internal accounts and found that one account was used to access its source code in a number of source code repositories. That said, the account did not have permissions to modify any code or engineering systems and the company’s investigation confirmed that no changes were made. Microsoft stated that these accounts were investigated and remediated.
The company had earlier reported that it detected malicious applications by SolarWinds in its environment, which were isolated and removed.
However, further investigation brought into light attempted activities beyond the presence of a malicious SolarWinds code in Microsoft’s environment. The tech giant confirmed that such activity has not put at risk the security of its services or any customer data. Also, the company found no indications of its systems being used to attack others.
On Dec. 30, Wedbush analyst Daniel Ives reiterated a Buy rating on Microsoft stock with a price target of $260 (upside potential of 17.3%). Ives expects the company to surpass earnings expectations for its December quarter as the remote working environment is accelerating the shift to cloud applications.
In a note to investors, the analyst commented “While we have seen the momentum of this backdrop in the last few quarters, we believe deal flow looks strong heading into the rest of FY21 as we estimate that Microsoft is still only ~35% through penetrating its unparalleled installed base on the cloud transition." (See MSFT stock analysis on TipRanks)
"To this point, we believe Azure's cloud momentum is still in its early days of playing out within the company's massive installed base and the Office 365 transition for both consumer/enterprise is providing growth tailwinds over the next few years," he added.
Currently, Microsoft scores a Strong Buy analyst consensus based on 23 unanimous Buys. The average price target of $250.76 indicates upside potential of 12.7% from current levels. Shares gained 41% in 2020.
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Enphase Energy is set to join the S&P 500 index on Jan. 7. The inclusion will place the solar energy stock among the most valuable companies on the benchmark index. Enphase closed 1.5% higher on Thursday.
Enphase Energy (ENPH), which currently trades on the S&P MidCap 400, will replace Tiffany & Co. in the S&P 500. The change comes after Tiffany shareholders recently agreed to a takeover by French luxury goods giant LVMH. The merger is expected to close on Jan. 7.
Meanwhile, Capri Holdings Limited, a member of the S&P SmallCap 600 will take Enphase Energy's place in the S&P MidCap 400.
Earlier in October, Enphase reported better-than-expected 3Q results. The company’s EPS of $0.30 per share beat analysts’ estimates of $0.24 per share. Revenues of $178.5 million also exceeded the Street’s estimates of $169.3 million. (See ENPH stock analysis on TipRanks)
On Dec. 24, Roth Capital analyst Philip Shen raised the stock’s price target to $220 (25.4% upside potential) from $160 and maintained a Buy rating. In a note to investors, Shen said that solar energy stocks have had a significant run-up through 2020. Looking ahead, Shen expects multiple expansion across the solar sector to continue in 2021.
From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 9 Buys and 6 Holds. The average analyst price target stands at $132.69, which implies downside potential of about 24.4% to current levels. The stock has skyrocketed 571.5% in 2020.
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Shares of Intrepid Potash jumped 36.1% on Thursday after the fertilizer manufacturer reported a significant rise in prices for potash and its Trio specialty fertilizer in the agricultural markets.
Intrepid (IPI) said that after a $20 per ton increase in December, the Trio price rose by $60 per ton in agricultural markets, up 27% above the 2020 summer pricing.
Meanwhile, potash prices increased by $90 per ton in agricultural markets, reflecting 31% growth from 2020 summer pricing. The $90 per ton increase includes a $40 per ton growth in December.
“Good weather and compelling fertilizer economics have spurred strong early season demand for potash and Trio in our domestic markets”, said Intrepid CEO Bob Jornayvaz. “A strong agricultural commodity environment across a wide range of crops that includes corn, soybeans, wheat, cotton, coffee and sugar, combined with a reduced potash supply has driven the improvements in the fertilizer market in recent weeks." (See IPI stock analysis on TipRanks)
Additionally, the company announced that the “oilfield outlook continues to improve in the Northern Delaware Basin driven by an increase in drilling and fracking activity. Intrepid currently forecasts first quarter 2021 and full year 2021 water volumes in excess of same time last year in the Intrepid and NGL Energy Partners (NGL) three-ranch area of mutual interest (AMI).”
On Nov. 4, Roth Capital analyst Matthew Farwell initiated coverage on Intrepid with a Buy rating and price target of $11 (54.5% downside potential). In a note to investors, Farwell said that a weak second-half 2020 is already factored into the company’s shares.
However, the analyst believes that Intrepid has favorable exposure to long-term agricultural fundamentals and expects the company’s oilfield solutions to generate steady cash flows.
Overall, consensus among analysts is a Moderate Buy. The average price target stands at $10.75 and implies downside potential of about 55.5% to current levels. In 2020, shares of IPI have depreciated by 10.9%.
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RedHill Biopharma Ltd. said that preliminary data results from the US Phase 2 study of its opaganib administered in patients hospitalized with COVID-19 pneumonia demonstrated positive safety and efficacy signals. Meanwhile, shares closed 5.6% lower on Dec. 31.
RedHill Biopharma (RDHL) reported that the findings of the Phase 2 study of 40 hospitalized patients requiring oxygen support demonstrated that opaganib was safe, with no material safety differences between opaganib and placebo treatments. The opaganib-treated group showed greater improvement in reducing oxygen requirement by end of treatment at day 14 across key primary and secondary efficacy outcomes. The focus of the study was to evaluate safety and identify preliminary signs of activity, rather than statistical differences, the company said.
Opaganib is a first-in-class, orally-administered, sphingosine kinase-2 (SK2) selective inhibitor with demonstrated dual anti-inflammatory and antiviral activity. It targets a human cell component involved in viral replication, potentially minimizing the likelihood for resistance due to viral mutations.
"We are pleased with these encouraging top-line results from our exploratory Phase 2 study which confirm opaganib's safety and demonstrate promising signals of activity when treating patients with COVID-19 and who require oxygen support,” commented RedHill Medical Director Mark L. Levitt. “We continue to work diligently to compile a robust data set to support potential filing of global emergency use applications."
The efficacy of opaganib as a treatment for patient with severe COVID-19 pneumonia is being further explored in an ongoing global Phase 2/3 study. The study is being conducted across 30 clinical sites in several countries and is on track to enroll up to 270 patients. RedHill expects to release top-line data results from the study in the first quarter of 2021.
Shares in RedHill Biopharma have dropped 6.3% over the past month, trimming their 2020 gain to 33%.
The stock was most recently reviewed by Roth Capital analyst Scott Henry, who cut the price target to $12 (49% upside potential) from $16 following the company’s Q3 results, which were impacted by the COVID-19 crisis.
However, Henry maintained a Buy rating on RDHL, calling the company's COVID-19 therapeutic program "a wildcard", with data likely expected in Q1 of 2021. (See RDHL stock analysis on TipRanks)
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AI-powered insurance company Lemonade announced on Thursday that it ended 2020 with over one million active customers. However, shares dropped 5.7% on the last trading day of 2020 as short seller Friendly Bear claimed that Lemonade’s update reflected “one of its weakest net add quarters since inception.”
Lemonade (LMND) reported that it hit the milestone of one million active customers in about 1,500 days since its initial launch, which as per the company is "some 15-45 years faster than industry leaders such as State Farm, Allstate, GEICO, and USAA."
Lemonade’s co-founder Shai Wininger stated “With every new customer, our system grows smarter, our underwriting gets better, and our prices become more accurate and fair. At Lemonade, one million customers translates into billions of data points, which feed our AI at an ever-growing speed. Quantity generates quality.”
In response to the company’s update, short seller Friendly Bear issued a report calling Lemonade “an egregious stock promotion disguised as a social impact company – the company is making a complete farce of the ESG investment movement.”
Friendly Bear stated “Lemonade publicly claims it gives “up to 40%” of vaguely described “unpaid money” to charity – the reality is that it gives a meager ~$1 per customer per year to charities (works out to about ~3% of “unpaid money”)…this is despite a) claiming to be a quasi-for profit social impact company, b) sporting a $7 billion market cap, and c) having raised hundreds of millions from VCs and the public markets that are readily available and on hand.”
With the expiration of the final lockup period, Friendly Bear sees “a rush for the exits in early 2021 with Lemonade falling 90%+ in short order”. (See LMND stock analysis on TipRanks)
Meanwhile, the Street remains sidelined on the stock, with 1 Buy, 3 Holds and 1 Sell adding up to a Hold analyst consensus. The average price target stands at $72.25 and indicates downside potential of 41% from current levels. Shares of Lemonade, which went public in July 2020, have exploded 138% over the past three months.
Recently, Morgan Stanley analyst Michael Phillips reiterated a Hold rating on the stock with a price target of $70 following a series of investor calls with the company’s CFO Tim Bixby about the drivers behind the company’s improved results and future sustainability.
The analyst noted that the company has been experiencing accelerating growth in its premium per customer driven by both mix-based and organic factors. However, he stated that “pricing has not played a material role, but rather management is seeing the maturation of customers accumulating wealth, and in turn more insurable assets".
"Overall, we see a tailwind to premium per policy as a normal course of LMND's strategy and operations as the company adds more coverages and its customer base matures," concluded Phillips.
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PDL Community Bancorp on Dec. 31 disclosed that PFS Service, the service company of its subsidiary Ponce Bank, has entered into a sale and leaseback contract for the real property located in Union City, New Jersey.
PDL Community Bancorp (PDLB) is the financial holding company for Ponce Bank and Mortgage World Bankers. The purchase price for the property is $2.4 million.
The carrying value of the property stood at $512,000 as of Dec. 22, 2020. Additional expenses were expected during the transaction process.
As part of the contract, Ponce Bank will lease back the property for an initial term of 15 years with four optional terms of five years each under the leaseback agreement. The initial base annual rent is estimated at $145,000 subject to a yearly rent hike of 1.5%.
“2021 will continue to be a year of investing – in the safety of our people and the future of our organization and our communities – with the clear goal of enhancing stakeholder values,” commented PDL Community Bancorp CEO Carlos P. Naudon. (See PDLB stock analysis on TipRanks)
Last month, Compass Point analyst Laurie Havener raised the stock's price target to $12 (14.2% upside potential) from $11 and reiterated a Buy rating. Shares have lost 29% in 2020.
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Lexicon Pharmaceuticals has initiated patient dosing in the Phase 2 clinical study (called RELIEF-PHN 1) of LX9211 for the treatment of post-herpetic neuralgia. Shares closed 3.3% higher on Thursday.
Lexicon’s (LXRX) LX9211 is a potent, orally delivered, selective small molecule inhibitor of adaptor associated kinase 1 (AAK1) and has received Fast Track designation from the U.S. Food and Drug Administration for the development in diabetic peripheral neuropathic pain.
The Phase 2 study, which involves 74 patients, is a randomized, double-blind, placebo-controlled, parallel-group, multicenter study evaluating the efficacy, safety and pharmacokinetics of LX9211 in the treatment of post-herpetic neuralgia.
The primary efficacy endpoint in the trial is the change from day 1 to week 6 in Average Daily Pain Score (ADPS), based on the 11-point numerical rating scale. (See LXRX stock analysis on TipRanks)
Commenting on the study, Lexicon's Praveen Tyle stated “People who develop shingles often suffer with persistent pain for months to years after the rash clears with limited treatment options. We believe LX9211 has the potential to offer a novel therapeutic approach to treating post-herpetic neuralgia. We look forward to completing this study and our other proof-of-concept study of LX9211 in diabetic peripheral neuropathic pain toward the end of next year.”
On Dec. 8, 2020, Citigroup analyst Yigal Nochomovitz upgraded Lexicon to Buy from Hold and raised the price target to $6 from $2.10 after adding sotagliflozin for heart failure in type 2 diabetes (T2D) to his model following positive data from the SOLOIST and SCORED studies.
In a note to investors, Nochomovitz stated that while he understands that questions on the regulatory path remain, he believes "the strength of the CV outcomes data as evidenced by back-to-back NEJM articles last month should go a long way in supporting a label for sota in T2D patients with HF [Heart Failure] (SOLOIST population)." The analyst feels that partnership discussions should regain momentum following this favorable data.
“We see sota in T2D patients with CKD (SCORED population) as upside to our valuation and do not currently include this indication in our model. Lexicon expects to meet with FDA to discuss the data in early 2021,” Nochomovitz added.
Overall, the Street has a cautiously optimistic outlook on Lexicon. The Moderate Buy analyst consensus is based on 3 Buys, 1 Hold and 1 Sell. The average price target of $4 indicates upside potential of 17% in the 12 months ahead. Shares plunged 17.6% in 2020.
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Wolters Kluwer Legal & Regulatory on Dec. 31 announced the sale of its French legal notices business, Annonces & Formalités Légales, to Médialex. Shares of the publishing company lost 1.2% at the close on Thursday.
Wolters Kluwer (0NMU) said that the divestment is consistent with the strategy of Legal & Regulatory to focus on professional information and software solutions in core legal markets. Financial terms of the deal weren't disclosed.
Médialex is part of the Sipa-Ouest-France Group. Annonces & Formalités Légales is engaged in the publication of legal notices and announcements for businesses in France. (See 0NMU stock analysis on TipRanks)
On Dec. 11, Goldman Sachs analyst Katherine Tait raised the price target on Wolters Kluwer stock to EUR68.80 from EUR68.40, but reiterated a Sell rating.
From the rest of the Street, the stock scores an analyst consensus of a Hold based on 3 Holds, and 1 Sell. The average analyst price target of €72.45 implies upside potential of 4% to current levels.
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McEwen Mining on Dec. 31 announced the highlights of a positive feasibility study (FS) for its Mexico Fenix project located in Sinaloa.
McEwen Mining (MUX), a gold and silver producer and explorer, said that the Fenix feasibility study predicted a 9.5-year mine life with an after-tax IRR (internal rate of return) of 28% using $1,500/oz gold and $17/oz silver. The project’s after-tax IRR almost doubled and the NPV (net present value) more than tripled compared to the base case at the current gold and silver price level.
IRR is the annual rate of growth an investment is expected to generate. NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
The average annual production forecast now stands at 26,000 oz gold in Phase 1 between years 1 to 6 involving a capital expenditure of $42 million. The average annual production forecast for Phase 2 is forecasted at 4,200,000 oz silver equivalent between years 7 and 9.5 involving capital expenditure of $24 million.
"The project will incorporate an environmentally progressive method of tailings management, using inpit storage that creates multiple benefits, most importantly a secure containment of tailings enabling better reclamation results," McEwen Chairman Rob McEwen stated. "Our next steps will involve detailed engineering, assessment of procurement options, and the evaluation of financing alternatives.”
In reaction to the company’s 3Q20 financial results, PEA [Preliminary Economic Assessment] expected from Fox Complex and ongoing drilling success at Whiskey Jack, H.C. Wainwright analyst Heiko Ihle reiterated a Buy rating on the stock on Nov. 2.
However, Ihle lowered the price target to $1.75 (78% upside potential) from $2.50 due to adjusted financials, as well as various cost revisions across McEwen's asset base. Shares have dropped 22.4% in 2020.
“During the quarter, the company recorded revenue of $27.4M amid a net loss of $9.8M, or ($0.02) per share. This compares to 3Q19 revenue of $32.7M and a net loss of $11.5M, or ($0.03) per share. The 16% YoY drop in revenue was based on the sale of 30,500 gold equivalent ounces (GEOs) in 3Q20, which declined by 36% YoY,” the analyst noted. (See MUX stock analysis on TipRanks)
"McEwen ultimately hopes to develop a plan for the Fox Complex and to reach an annual production rate of 100,000 – 150,000oz of gold at a cash cost of $800/oz, over a ten-year period,” he added. “McEwen commenced a new drill program at the Whiskey Jack target within Grey Fox. In short, the campaign continues to see success as visible gold occurred in eight of the 15 shallow holes drilled to-date.”
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Annaly Capital Management authorized a new share buyback program for the repurchase $1.5 billion of its outstanding shares through December 31, 2021. Shares of the mortgage real estate investment trust edged 1.1% higher at the close on Thursday.
Annaly (NLY) said that that the new repurchase plan will replace the company’s existing $1.5 billion share repurchase program, which had expired on December 31, 2020.
Earlier, On Dec. 11, 2020, the company announced a cash dividend of $0.22 per share, which will be payable on Jan. 29 to common shareholders of record on Dec. 31, 2020. (See NLY stock analysis on TipRanks)
Its annual dividend of $0.88 per share, translates into a dividend yield of 10.41%.
On Dec. 18, KBW analyst Bose George upgraded the stock to Buy from Hold citing its valuation. George maintained a price target of $9 (6.5% upside potential).
In a note to its investors, the analyst said that in 2021, the mortgage banking sector will continue to operate at more moderate levels than 2020, given a "fairly stable" interest rate environment and improving economy.
Like George, the rest of the Street also has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 8 unanimous Buys. Meanwhile, the average analyst price target stands at $8.88, and implies 5.1% upside potential at current levels. Shares were down 10.3% in 2020.
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Gold Resource on Dec. 31 announced leadership changes following the spinoff of the Nevada Mining Unit (NMU) into a distinct, separate public company, named Fortitude Gold on Dec. 31, 2020. Shares of the precious metal explorer lost 5.5% at the close on Thursday.
Gold Resource (GORO) appointed Bill Conrad as Fortitude Gold’s Board Chairman and Jason Reid as CEO, President and director.
Meanwhile, Alex Morrison will succeed Conrad as the Chairman of Gold Resource. Conrad will continue to serve as an independent director on the company’s board.
Allen Palmiere was appointed to succeed Reid as the CEO and director of Gold Resource. As such, Reid will step down from all company positions to be at the helm of Fortitude Gold.
In addition, Lila A. Manassa Murphy and Mr. Joseph Driscoll have been appointed as independent directors to sit on Gold Resource's board.
In reaction to the company’s 3Q20 financial results and strong liquidity position to support the spinoff, H.C. Wainwright analyst Heiko Ihle reiterated a Buy rating on the stock on Nov. 4.
Ihle set a price target of $7.50 (158% upside potential) on the stock. Shares have lost 47.5% in 2020.
“During the quarter, the company generated an impressive $42.3M in revenue (+6% YoY) and strong net income of $5.0M, or $0.07 per share. The YoY revenue improvement is primarily attributable to greater gold production from GRC's Nevada Mining Unit, as well as higher average realized prices for gold, silver, copper, and zinc,” commented Ihle in a note to investors.
“GRC held a working capital balance of $50.0M, including $31.3M in cash, at the end of 3Q20. This figure increased from $33.6M at the end of 2Q20. In short, we believe that GRC's liquidity should suffice to support the proposed near-term spin-off of its NMU into a separate publicly traded company,” the analyst summed up.
Furthermore, Ihle believes that the proposed spinoff will allow the Oaxaca Mining Unit (OMU) to better focus on exploring its large land package with polymetallic production, while he anticipated the NMU to focus on exploration and a meaningful dividend with exposure to gold production. (See GORO stock analysis on TipRanks)
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Ford Motor announced that it has decided to pull out of a proposed joint venture with India’s Mahindra & Mahindra citing ongoing global economic and business challenges.
Ford (F) said, “the outcome was driven by fundamental changes in global economic and business conditions – caused, in part, by the global pandemic – over the past 15 months. Those changes influenced separate decisions by Ford and Mahindra to reassess their respective capital allocation priorities.”
The two companies entered into an agreement in October 2019 under which Ford was expected to transform its Indian operations into a joint venture that would be majorly controlled by Mahindra. The deadline to sign a formal joint venture agreement between the two companies was Dec. 31, 2020. (See F stock analysis on TipRanks)
Ford now intends to continue its standalone operations in the country. The US automaker stated that it “is actively evaluating its businesses around the world, including in India, making choices and allocating capital in ways that advance Ford’s plan to achieve an 8% company adjusted EBIT margin and generate consistently strong adjusted free cash flow.”
On Dec. 21, Benchmark analyst Michael Ward raised the stock’s price target to $12 (36.5% upside potential) from $11 and reiterated a Buy rating, citing improving industry sales trend in North America along with Ford’s restructuring initiatives, inventory replenishment, and new products.
As a result, Ward expects the company’s earnings to accelerate in 2021 and further improve in 2022.
The stock scores an analyst consensus of a Hold based on 9 Holds, 3 Buys and 1 Sell. The average price target of $9.35 implies upside potential of about 6.4% to current levels. Shares have declined by about 5.5% in 2020.
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