Key insights
- Jefferies raised its price target on Ford to $14.50, citing improved EBIT and free cash flow estimates driven by the Blue segment. Ford's battery energy storage system is projected to contribute positively starting in 2029. The universal EV platform is scheduled for launch in the second half of 2027. While the stock appears overvalued, the 4% dividend yield may attract investors. The impact on US equities is slightly positive due to improved outlook.
Investing.com - Jefferies raised its price target on Ford Motor Company (NYSE:F) to $14.50 from $13.50 while maintaining a Hold rating on the stock. The shares currently trade at $14.93, hovering near their 52-week high of $14.95 after delivering a 51% return over the past year.
The firm increased its adjusted EBIT estimate by 9% to $9.5 billion, driven by a 17% increase in its Blue segment forecast to $4.9 billion with a 4.7% margin. Free cash flow estimates rose to $1.2 billion, still assuming $5 billion of supplier compensation. According to InvestingPro analysis, Ford currently appears overvalued relative to its Fair Value, though the company’s 4% dividend yield may appeal to income-focused investors. For deeper insights into Ford’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available for this and 1,400+ other US equities.
Jefferies met with CFO Sherry House and the Ford team in Dearborn last week for test drives and discussions on autos and batteries. The firm noted that Novelis production starts normalizing in the second quarter, though the full impact on inventory may carry into 2027. The guided $1.5 billion to $2.0 billion in incremental costs linked to Novelis recovery could run above or below depending on volume.
The firm projects Ford’s battery energy storage system business will contribute positively starting in 2029, with revenue of approximately $4 billion and earnings per share of $0.14 in 2030. The estimates assume a gradual rollout reaching 15 gigawatt-hours for utilities and 4 gigawatt-hours for retail by 2030, with gross margins rising from 10% to 30%.
Ford’s universal EV platform is scheduled to launch in the second half of 2027. The company is partnering with CATL on battery facilities in Marshall, Michigan and Kentucky, with CATL providing equipment specifications, staff training and help sourcing U.S.-approved materials to secure the $45 per kilowatt-hour production credit.
In other recent news, Ford Motor Company announced the issuance of $1 billion in 6.467% notes due in 2036 as part of its ongoing debt issuance program. This financial move was conducted under the company’s effective shelf registration statement with the Securities and Exchange Commission. Additionally, Ford held its annual shareholder meeting, where all nominated directors were re-elected, and key proposals were approved, including executive compensation and governance matters. In personnel changes, Ford’s global chief marketing officer, Lisa Materazzo, will depart the company on June 1, with Dean Stoneley stepping in as interim CMO.
Ford also signed a significant five-year energy storage deal with EDF, agreeing to supply up to 20 gigawatt-hours of storage capacity to support renewable power projects. This agreement positions Ford Energy as a key supplier of battery energy storage systems for EDF, with deliveries expected to begin in 2028. In light of this development, Morgan Stanley reiterated its Equalweight rating on Ford stock, maintaining a price target of $14. These recent developments highlight Ford’s strategic moves in financial management, leadership, and renewable energy initiatives.
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