Ford’s Stock (NYSE: F) Outperforming – What Markets Expect from Earnings Today

Ford's stock (NYSE: F) has had plenty to deal with in recent months; as strategic investments, evolving market expectations, and critical financial milestones all come into focus. With Q1 2025 earnings due today after the closing bell, we can expect plenty of eyeballs in the coming days. What are markets expecting out of Ford for the quarter, and what might the future hold?

Looking at today's print, analysts project earnings per share (EPS) of $0.02, a sharp decline from the prior year’s $0.49, alongside a 10% revenue drop to $35.8 billion. This low bar reflects broader market skepticism tied to macroeconomic uncertainties, including fluctuating trade policies and inflationary pressures.

The company’s ability to surpass these subdued expectations hinges on its Ford+ growth strategy, which emphasises electrification, commercial solutions (Ford Pro), and traditional ICE/hybrid vehicles (Ford Blue). CEO Jim Farley’s commentary during the earnings call will likely address progress in these segments, particularly the $1 billion in targeted cost savings and the performance of Ford Pro, a key revenue driver in 2024.

Management’s full-year guidance underscores ongoing challenges, with adjusted EBIT projected at $7.0–$8.5 billion and free cash flow expected to shrink to $3.5–$4.5 billion. The Model e division alone is forecast to lose $5.0–$5.5 billion in 2025, reflecting the steep costs of Ford’s electrification push.

Despite declining financials, and a 26% stock decline over the past year, Ford’s dividend yield remains a standout feature. Back in the $10 range that has proved a comfort zone over the past year, the YTD gain of 6.53% reflects an outperformance on broader markets, with the S&P 500 3.1% down on the period.

Ford's forward yield sits at 5.57%, with a trailing yield of 6.5% when including special dividends. At a current price of $10.28, Ford's stock trades at a P/E ratio of 7 and a price/sales ratio of 0.24, both below industry averages.

However, risks persist. Ford’s enterprise value reflects substantial debt, and its interest coverage ratio of 2.53 lags behind peers like Volkswagen (39.74) and Stellantis (10.00). These metrics highlight the delicate balance between leveraging growth initiatives and maintaining financial stability.

Technical indicators present a mixed picture. The 50-day SMA ($9.73) and 200-day SMA ($10.39) suggest near-term consolidation, while an RSI of 75.09 signals overbought conditions. Nevertheless, the stock’s resilience amid tariff-related volatility hints at somewhat of a price floor. Analysts at Bank of America argue that Ford’s valuation already prices in macroeconomic risks, leaving room for upside if earnings surprise.

Recent Operational Improvement

May 2024 marked Ford’s third-best EV sales month on record, with 8,966 units sold, a 65% year-over-year increase. This surge underscores growing consumer acceptance of Ford’s electrified lineup, including the updated 2025 Mustang Mach-E. The European variant now features a standard heat pump for improved cold-weather efficiency, three new exterior colors (Velocity Blue, Molten Magenta, Terrain), and a redesigned interior. These enhancements align with Ford’s broader push to refine EV offerings amid slowing industry-wide adoption rates.

Ford’s $500 million investment in its Kentucky Truck Plant, announced in early May, further solidifies its commitment to U.S. manufacturing. The facility will produce the 2025 Expedition SUV, part of Ford’s “Built for America” campaign. This initiative not only supports local employment but also positions Ford to capitalize on shifting trade dynamics, particularly if EU tariffs on U.S. imports are reduced.

The appointment of Sherry House as CFO in March 2025 has injected fresh optimism into Ford’s strategic direction. House’s emphasis on capital allocation and cost discipline aligns with the company’s goal of achieving EBIT margins of 7-8% by mid-decade. Additionally, Ford’s decision to separate its ICE (Ford Blue) and EV (Model e) divisions aims to streamline operations and attract sector-specific investors.

Ford’s near-term trajectory will be defined by its ability to deliver on cost-saving initiatives, navigate regulatory headwinds such as new tariffs on Chinese EV components, and accelerate EV profitability. The Ford Pro commercial division remains a bright spot, driven by growth in SaaS and fleet management services, but rising interest rates and macroeconomic uncertainty could temper demand in the latter half of 2025.

While technical indicators suggest the potential for a short-term rally, the fundamental challenges warrant a cautious approach. The Q1 earnings call will be a crucial barometer for management’s ability to restore confidence and chart a sustainable path forward.