Normally, news of layoffs tends to do good things for stock prices. That did not hit for legacy automaker Ford (F), who recently announced that it was planning to lay off 1,000 workers from its factory in Cologne, Germany. That layoff news did not bring investors happy to hear about cost-cutting, but rather, concerned investors instead. Ford shares slipped fractionally in Tuesday afternoon’s trading.
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The Cologne plant dealt with electric cars, which as it turns out, are not exactly in demand in a lot of places right now. That turns out to be the case even in Europe, which some regarded as a stronghold of demand for the ecologically-aware vehicles. Further, the 1,000 jobs on the block in Cologne are in addition to the planned 4,000 jobs Ford was set to cut throughout Europe as a whole by the end of 2027.
Worse, not only is demand on the decline for Ford, but Ford also faces growing competition. There is less pie on the table, and there are more forks eagerly going for slices. Chinese automakers are shrugging off tariffs in Europe and are looking to build plants on the continent as well. Throw in declining government incentives to buy and some deficiencies in charging infrastructure, and the end result is bad news for sales…and from there, production.
Why the Glass House Had to Go
We found out yesterday that Ford was taking out the Glass House, the building that served as its headquarters for close to 70 years. But now, some experts are coming out and advancing ideas as to why Ford suddenly needed to make this change.
One of the biggest ideas came from Wedbush Securities analyst Dan Ives, who has nearly a five-star rating on TipRanks. Ives noted, “This is all part of Ford building out its future brand and strategy. The headquarters is important and it shows Ford taking a leap forward on its innovation path while keeping its 313 roots.” But for Ford lead clay sculptor Jeff Royer, the new building is all about a whole lot of natural light, which the building reportedly delivers.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on three Buys, eight Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 7.16% rally in its share price over the past year, the average F price target of $10.77 per share implies 7.2% downside risk.
