Ford Stock (F) Near 52-Week High Ahead of Earnings – Will Results Fuel the Next Move?

Ford Motor Company (NYSE: F) is at a critical juncture. The stock is hovering near its 52-week high of $12.80, up 5.70% in the last five days. The question on everyone's mind: can today's earnings release provide the necessary catalyst to push Ford past this resistance level?

Analysts expect Ford to report earnings per share (EPS) of $0.36, down from $0.49 in the same quarter last year, reflecting lower profitability likely tied to cost pressures and shifting market dynamics. Revenue is projected to reach $43.86 billion, representing a modest 1.84% year-over-year increase. Overall, forecasts suggest steady sales performance supported by resilient demand, though margin compression and competitive headwinds may weigh on Ford’s bottom line in the upcoming earnings report.

Ford's Model e division, responsible for EVs, reported a $1.2 billion loss in Q3. This loss highlights the ongoing struggle for automakers to achieve profitability in the rapidly evolving EV market, particularly given the significant investments required in battery technology and manufacturing.

In response to these challenges, Ford is strategically shifting gears. The company recently announced the cancellation of its all-electric three-row SUV program, opting instead to focus on developing three-row hybrid SUVs. This decision resulted in a $1 billion charge in Q3, reflecting the cost of adapting to changing consumer preferences. CEO Jim Farley emphasized the company's agility in responding to market demands, particularly the unexpected popularity of hybrid models, especially trucks.

Looking ahead, Ford has adjusted its full-year guidance, now expecting adjusted earnings of approximately $10 billion, compared to the previous forecast of $10 billion to $12 billion. The company maintains its projection for adjusted free cash flow between $7.5 billion and $8.5 billion.

While the market seems cautiously optimistic about Ford's strategic pivot towards hybrids, we believe this may be a premature victory lap. The long-term trend is undeniably towards full electrification. By scaling back its EV ambitions, Ford risks ceding market share to competitors who are more aggressively pursuing electric vehicle technology. The current popularity of hybrids might be a temporary phenomenon fueled by consumer anxiety about charging infrastructure and range limitations. In the long run, consumers will likely demand fully electric vehicles, and Ford's current strategy could leave them playing catch-up.

Furthermore, the cost of maintaining both EV and hybrid platforms could strain resources and hinder innovation in either area. The $1 billion charge associated with the cancellation of the electric SUV program is a sunk cost, but it also represents a missed opportunity to establish a leadership position in the burgeoning electric SUV market. While agility is important, a complete strategic about-face raises questions about Ford's long-term vision and commitment to electric vehicles. Perhaps the market is being too quick to reward a move that, in the long run, could prove to be a strategic misstep.

The path forward for Ford is complex. The company must balance the immediate need for profitability with the long-term imperative of transitioning to electric vehicles. The coming quarters will be crucial in determining whether Ford can successfully navigate the challenges and capitalize on the opportunities presented by the evolving automotive landscape. Analysts at Goldman Sachs have revised their price target from $11 to $12 maintaining a neutral stance.