Jefferies said in a research note that Ford Motor F -2.91% will have to deal with a number of problems in the coming quarters.
Shares of the car company were lowered from Hold to Underperform by analysts led by Philippe Houchois. They also lowered their price goal from $12 to $9.
On Monday, Ford’s price dropped 4.7% to $9.91. As of Friday, 2024, shares had dropped 15%.
The analyst team thinks that Ford could gain if President-elect Donald Trump loosens some rules on vehicle emissions and electric vehicle policies. However, they also said that it is not clear when or how big of an effect this will have.
At the moment, Ford’s U.S. inventory is higher than its competitors’, even though sales are good. The analysts wrote that while steady output supports lower guidance for 2024, it points to a tougher start to 2025.
Ford also has to deal with a lot of problems, such as resizing the business if it decides not to shut down its operations in Europe and a strategy for electrification that hasn’t been announced yet but “we suspect might be centered on range extenders,” Jefferies said.
Jefferies says, “We downgrade Ford to underperform on a combination of earnings pressure and a set of tough decisions ahead.” “We understand that actions to restructure could lead to positive responses, but we are worried about the timing and the effect on the balance sheet.”
Ford didn’t answer right away when asked for a word on Jefferies’ downgrade.
The Jefferies analysts kept their Hold rating on General Motors GM +0.04% stock and set a price goal of $52 for it. According to what they wrote, management has been running the business well for more than a year. The company “has stayed the course on EVs with tactical adjustments while avoiding a major strategy reset.” GM stock fell 1.1%.
