Key insights
- Ford Motor stock surged following a Morgan Stanley upgrade, highlighting its energy storage subsidiary, Ford Energy, as a significant profit driver. The analyst cited a strategic advantage through a CATL licensing agreement, positioning Ford as a key domestic supplier. This business is projected to offset EV division losses and potentially reach profitability by 2028. Ford also raised full-year EBIT guidance, contributing to a positive outlook despite broader market inflation concerns.
Investing.com -- Ford Motor Company stock surged +13.18% in afternoon trading today after Morgan Stanley analyst Andrew S. Percoco published a detailed research note arguing that Ford’s newly formed energy storage subsidiary, Ford Energy, represents a significant and largely overlooked profit driver — one that could help offset persistent losses in the company’s electric vehicle division. The gains came after Percoco highlighted Ford Energy as an underappreciated competitive advantage, noting that the company’s licensing agreement with CATL positions it as one of the few semi-vertically integrated domestic energy storage system suppliers in the United States. In Percoco’s own words: "We believe Ford’s relationship with CATL is an underappreciated strategic competitive advantage for its Energy Storage business. Through this relationship, Ford becomes a key supplier of compliant ESS systems to utility and data center customers in the US."
Percoco also signaled that a supply deal could be imminent, writing: "We believe that there is a fairly high likelihood that Ford signs an energy storage system supply agreement with large commercial customers, and potentially hyperscalers, over the next few months." The firm believes Ford’s energy business could turn profitable on an EBIT basis by 2028 — a meaningful shift given that the Model e division is expected to post a $4.25 billion EBIT loss in 2026 — and estimates Ford Energy could generate $500 million to $600 million of run-rate EBIT at 20 GWh of production. Adding to the bullish backdrop, Ford posted Q1 2026 EPS of $0.66 on revenue of $43.25 billion, up 6% year over year, and management raised full-year adjusted EBIT guidance to a range of $8.5 billion to $10.5 billion.
Ford’s gains far outpaced moves in other major auto stocks, with General Motors rising 0.4%, Stellantis advancing 2.7%, and Tesla gaining 3.9%. On the broader market front, the session was shaped by a hotter-than-expected inflation reading: the PPI jumped a seasonally adjusted 1.4% for the month, well above the 0.5% expected, leaving most major indices under pressure. The S&P 500 nonetheless managed a modest gain of +0.60%, while the NASDAQ added +1.22% and the Dow Jones edged slightly lower by -0.16%.
Ford originally disclosed a $2 billion capital commitment to energy storage late last year, a move initially received with doubt partly because it coincided with a $20 billion impairment charge related to its EV operations — but Wednesday’s substantial price movement indicates investors are reassessing the opportunity, with Ford shares showing minimal reaction when Ford Energy was first revealed earlier in the week, requiring Morgan Stanley’s detailed analysis to capture the market’s full attention. Together, the analyst re-rating of Ford’s energy narrative, a solid Q1 earnings foundation, and the prospect of imminent hyperscaler supply contracts combined to make Ford the standout performer in the S&P 500 today.
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