Normally, bad news from an analyst can send shares on a downward track. Legacy automaker Ford (F) discovered that it was no exception, as analysts are increasingly turning on Ford. Investors did not exactly feel very secure in their Ford positions either, in light of the growing concern, and Ford shares slipped modestly in Tuesday afternoon’s trading.
We knew about the recent turn that Ford suffered at the hands of Bernstein analysts, with analyst Daniel Roeska declaring that “patience (is) running out.” With Ford shares underperforming the broader market—Ford shares are up 13.9% while the S&P 500 is up 35.9%—it is easy to see why analysts are beginning to get concerned.
Worse, there are signs that competition is heating up. We heard yesterday about General Motors’ rise while Ford slips, and now, Ford is threatened on a whole new front: China. Teslarati reported that BYD (BYDDF) is on track to match Ford’s production. Ford produces an average of 1.1 million vehicles a quarter. BYD, apparently, sold close to half that amount in October alone. That suggests that BYD may be on track to match Ford in sheer production volume.
Reviews Doing Well
There is one bright spot for Ford, however; the reviews of its released products are being very kind to it. For instance, a Forbes review of the Ford Transit Courier declared it “…perfectly suited to small businesses that don’t have tonnes of stuff to lug around.” It also declared the six-speed gearbox as “…a pleasure to use,” with the worst complaint being that the engine felt “underpowered on steeper inclines.”
Meanwhile, Motor1 declared the Ford Ranger “…all the truck you need.” It did include one minor caveat, “…unless you’re towing an aircraft carrier.” The review noted that Ford had sold around 200,000 F-series pickup trucks but only 15,500 Ranger pickups. The reviewer, for his part, had “…no idea why” this was the case, as the Ranger has more than enough to speak for it. These kinds of reviews should go quite some way toward convincing potential vehicle buyers to go with—or stick with—Ford.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on five Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 20.86% rally in its share price over the past year, the average F price target of $11.75 per share implies 5.9% upside potential.
