Key insights
- UBS upgraded Ford to 'buy' with a $15 price target, citing a path to $2+ EPS by 2027, driven by product portfolio, regulatory environment, EV strategy, and software focus. The firm believes concerns over gasoline and aluminum prices are overblown. Ford's dividend yield adds appeal. The upgrade suggests a positive outlook for Ford's earnings and stock performance, potentially influencing investor sentiment in the automotive sector.
Investing.com - UBS upgraded Ford Motor (NYSE:F) to buy from neutral on Tuesday, maintaining a price target of $15.00. The stock currently trades at $12.16 with a market capitalization of $48.65 billion, suggesting potential upside of roughly 23% to the analyst’s target.
The firm sees a path for Ford to earn more than $2 in earnings per share in 2027, with its estimate at $2.08, which is 17% above consensus. UBS believes the market is pricing in 2027 EPS of $1.73, approximately 16% below its forecast. According to InvestingPro, analysts predict the company will be profitable this year, with EPS forecast at $1.57 for 2026—a significant turnaround from the last twelve months’ loss of $2.06 per share.
The upgrade thesis is based on Ford’s product portfolio, a more lenient U.S. regulatory backdrop combined with a more pragmatic electric vehicle strategy, an emerging battery energy storage system opportunity, and increased focus on higher margin Pro software. UBS sees Ford moving toward $3 in EPS power beyond 2027.
Shares have been under pressure due to concerns over higher gasoline prices and higher aluminum prices. UBS believes these concerns are overdone, noting that aluminum prices will not impact 2026 results as they are hedged. Ford offers a dividend yield of 4.93%, having maintained payments for 15 consecutive years.
The firm expects transient headwinds to dissipate in the second half of 2026 and beyond.
In other recent news, Ford Motor Company has announced a significant reduction in production timelines for its Sharrow Propeller, cutting the time from 130 days to approximately two weeks. This improvement is due to a collaboration with Ford using advanced 3D sand-casting techniques. Additionally, Ford Motor Credit Company has issued $1.5 billion in 5.420% notes due in 2031, under an effective registration statement filed with the Securities and Exchange Commission. In another development, Ford is recalling 1.74 million vehicles in the U.S. due to rearview camera defects that may prevent images from displaying, impacting the driver’s view. The recall affects specific Ford Bronco and Ford Edge models, as reported by the U.S. National Highway Traffic Safety Administration.
Moreover, Ford has partnered with onX to offer eligible Ford owners complimentary access to outdoor navigation apps for one year. This offer is available to U.S. owners of 2017 model year and newer vehicles with an active modem. Meanwhile, UBS has highlighted potential challenges for U.S. automakers, including Ford, due to competition from Chinese electric vehicles, despite existing trade barriers. These recent developments reflect Ford’s ongoing efforts to enhance its product offerings and address safety concerns.
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