Analysts at Jefferies said Monday that Ford Motor Co.’s stock has been much worse than rival General Motors Co.’s all year. However, it’s still too early to buy on the lows because Ford’s stock is likely to keep doing worse, they said.
On Monday, Ford stock fell 4.2% to $9.95 a share. In 2024, Ford’s stock is down 18.8%, while General Motors’ stock is up 43.8%. This year, the S&P 500 SPX +0.26% has gone up 27.2%.
In Monday morning trade, Ford’s stock price fell 3%.
Jefferies expert Philippe Houchois said that even though Ford stock is much cheaper than it has been in the past, it’s still not time to buy it. He said that the company will face more problems in the future.
Ford was demoted from hold to underperform, and his price goal for the car and truck maker was lowered from $12 per share to $9 per share. This was done because he thinks the company will continue to “diverge” from GM.
He said that Ford’s U.S. stock has been “drifting up” for more than three months, even though sales have been “solid.”
“Sustained production supports the lower guidance for 2024 but points to a tougher start to 2025,” said Houchois, an analyst at Jefferies.
Also, the company has to make a tough choice about whether to cut back on or even leave its European business, which brings in about a quarter of its adjusted earnings per share for 2024.
He also said that Ford has another problem in that it hasn’t put its new plan for electric cars into action or even said it would.
He also said that Ford needs to fix its “structural cost deficit” and the roughly $8.5 billion gap between premiums for warranties and cash losses since the start of 2020.
Jefferies kept its “hold” rating on General Motors and its price goal at $52 a share for the stock.
The new Trump government may lower emission standards, which could be good for both Ford and GM. But, he said, the timing and specifics of any such plans are still unknown.
