Could legacy automaker Ford (F) be on its way to starting a bank? A bank in a manner of speaking, at any rate. The Federal Deposit Insurance Corporation (FDIC) recently gave Ford—as well as its immediate rival General Motors (GM)—authority to start an industrial bank, and provide financial services along with opening the bank. The news did little to shift sentiment in either direction, and Ford shares were down fractionally in Friday afternoon’s trading.
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Ford received conditional approval for the move recently, and was required to set up lending arms within the next 12 months as part of the conditions noted earlier. Ford’s bank will be established in Utah, reports noted, and will not only take deposits, but also offer certificates of deposit (CDs) and auto loan financing down the line.
The move is somewhat controversial, as “industrial loan charters” are giving manufacturers and other commercial firms the ability to perform banking functions, but without a lot of the oversight that goes into establishing a standard bank, reports note. But others note that an industrial bank is actually much more limited by design, therefore the oversight is much less necessary than it would be for a full bank.
Kentucky Expansion
Ford also stepped up its operations in Kentucky recently, adding on to the Kentucky Truck Plant site. A recent landscape permit called for Ford to clear 67 acres’ worth of trees on its land, which in turn will clear the way for “industrial manufacturing” purposes.
Ford representative Jess Enoch noted, “This expansion of the Kentucky Truck Plant site is another example of Ford’s commitment to American manufacturing. It follows our announcement in August of a $2 billion investment in the future of manufacturing at Louisville Assembly Plant.” Enoch also noted that Ford had put around $300,000 into supporting a project called Trees Louisville, a charity that focuses on tree-planting efforts.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 11 Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 35.47% rally in its share price over the past year, the average F price target of $13.87 per share implies 1.95% upside potential.
