Watch out Tesla (TSLA), because carmaker Ford (F) may be one of your biggest competitors in 2022. The company recently announced a set of changes around its Lightning F-150 electric truck that have potential buyers very excited. Ford's growing dominance in the electric vehicle market is deeply attractive. It's a great time to be bullish on Ford, thanks to this major potential new growth avenue.
Ford's year in share prices so far is basically three large plateaus. There was a jump in early January 2021 that took Ford from around $8 to nearly $11 per share. Ford then spent the rest of January into about mid-May around $11. That's when another jump kicked in that took Ford to around $16. However, Ford lost a bit of ground after that and started a slightly downward-sloped plateau to about $14 per share, where it remained until early October. Ford then caught a major upward movement, going from $14 to just over $20 in about two weeks. Subsequently, Ford's share price made a serious play for $22 before slipping back to around the $20 level, which is where we are today.
The latest news should make Ford even more attractive. Not only is Ford re-opening the purchase order market for its Lightning F-150 pickup, but it's also planning a huge new increase in production on that line. Previously, Ford shut down advance orders due to overwhelming demand. Now, Ford will make 150,000 Lightning F-150 models every year. This comes just a month after Ford's plan to triple production on its Mustang Mach-E electric car line.
Wall Street's TakeTurning to Wall Street, Ford has a Moderate Buy consensus rating. That's based on 10 Buys, 5 Holds, and 3 Sells assigned in the past three months. The average Ford price target of $20.59 implies 12.98% downside potential.
Analyst price targets range from a low of $12 per share to a high of $25 per share.
A Huge New Product Line Could Revitalize FordFord was never anyone's idea of a growth stock. A company that's been around for a century or so - anyone else remember the Model T? - has generally gone about as far as it can go. Ford is already bucking that trend, however, with its recent performance. Just look at Ford stock for the last five years. You can actually see the crater left by the pandemic. You can also see the nine months that Ford took to claw its way out of said crater to resume its plateau around the $9 mark, where it had been since at least 2017.
Then you can see the spike that kicked in back around September. That took Ford from “moderate gains” to “how did Ford double its share price in less than a year?”. It's tempting to say that all the gains are directly connected to Ford's explosive new lineup of electric cars. It's at least partially true, after all. Electric cars helped drive Ford's massive growth and made Ford the top growth stock in the auto industry for 2021. That includes Tesla. Ford managed to hit not only a five-year high, but also a 20-year high on December 10, after the announcement of tripled production on the Mustang Mach-E.
However, there's more than just electric car growth to account for here. Remember that October 2020 saw the departure of CEO Jim Hackett, who was replaced by Jim Farley, an auto industry veteran who promised more transparency for investors. Its massive production infrastructure, including its Michigan plants, will give Ford a further edge going forward.
It hasn't been all smiles, sunshine, and open roads for Ford, though; recent reports suggest that the new Bronco's soft top lets in quite a bit of snow during heavy snow conditions. The pictures that accompany said reports are a sight to see; of all the interior options Ford offers, “frosted” is not on the list. Nor should it be.
Also, there's the matter of Ford's dividend history. The dividend recently dropped from $0.15 to $0.10. Ford hasn't had a dividend that low since 2013. The company held to a $0.15 dividend for most quarters starting in 2015. However, in January 2020, the company halted dividend payments, likely due to the pandemic. The company restarted dividends back in November, which is likely a welcome sight for investors and should continue.
Concluding ViewsDespite a few minor hiccups, Ford is racing ahead. It was 2021's top growth stock in the auto industry, an amazing feat for a company that's been in business for over 100 years. Realizing further growth isn't that outlandish either. It's making a major new push in the electric market, and it still has plenty of life left in the internal combustion sector as well.
Looking for Ford to continue its growth isn't an outlandish proposition. It's already demonstrated its ability to produce cars that people want. With a major new market firing up in the electric vehicle sector and Ford already possessing the infrastructure to meet the demand, Ford could well beat Tesla at its own game. I look forward to seeing if it can, and I remain bullish on the chance that it will.
Disclosure: At the time of publication, Steve Anderson did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates. Read full disclaimer >
Due to supply-chain issues and global chip shortages, Ford Motor Company (NYSE: F), one of the top EV stocks on TipRanks, reported a drop in vehicle sales in the U.S. for December and full-year 2021. Notably, the numbers also lagged its peers, Toyota Motor (NYSE: TM) and General Motors Co. (NYSE: GM), in 2021.
Following the news, shares of the American multinational automobile manufacturer closed 2.67% lower on Wednesday.
Vehicle NumbersFord reported a 17.1% year-over-year decline in total U.S. sales in December 2021 to 173,740 vehicles. Total truck sales dipped 15.5% to 91,699, while sales of SUVs were down 11.1% to 77,377.
On a positive note, Ford's electrified vehicles grew 36% faster than the overall segment in 2021 and achieved a new sales record for the month of December and full-year 2021. Markedly, sales of electrified vehicles rose 121.1% year-over-year to 12,284 in December.
For 2021, total U.S. sales were down 6.8% year-over-year to 1,905,955 vehicles. Notably, truck sales were down 8.2% to 1,011,198, while SUVs sales jumped 10.4% to 827,278.
Milestones AchievedPer the company’s report, Ford recorded its best-ever year for electric vehicles sales, coming in just behind Tesla (TSLA) in 2021. Markedly, Mustang Mach-E sales came in at 27,140 in 2021. Beginning in 2022, Ford will commence customer deliveries for both the F-150 Lightning and E-Transit electric vehicles, expanding its share of the EV market.
Ford was the bestselling automaker in the fourth quarter. The company recorded quarterly sales of 508,451 vehicles, up 26.8% sequentially, compared to an overall industry decrease of around 3%.
Having sold 162,979 vans, Ford marks its 43rd straight year as America’s best-selling commercial van lineup.
Additionally, the F-Series was the best-selling truck for the 45th straight year and the best-selling vehicle in America for the 40th year in a row.
Recently, Ford revealed its plans to nearly double the production of its F-150 Lightning pickup to 150,000 trucks annually.
Official CommentsAndrew Frick, VP, Ford Sales U.S. and Canada, said, “Ford finished the year strong, as the only U.S. automaker hitting the half million sales mark in the fourth quarter, making Ford America’s best-selling automaker...Looking to the new year, Ford had just over 70,000 new vehicle orders in December, which will provide continued momentum into 2022.”
Wall Street’s TakeOn January 5, CFRA maintained a Buy rating on the stock and lifted the price target to $32 (35.25% upside potential) from $8.
The rest of the Street is cautiously optimistic about the stock, with a Moderate Buy consensus rating based on 10 Buys, 5 Holds, and 3 Sells. The average Ford price target of $20.59 implies 13% downside potential from current levels. Shares have gained 69.1% over the past six months.
Smart ScoreFord scores a 9 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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