Concerns about quality at legacy automaker Ford (F) were one thing, but the idea that Ford might be hurting for cash right now is a whole other matter. But that may be the case, as Ford recently revealed that it has a new $3 billion line of credit to draw on. Ford investors were not at all pleased with this massive new debt in the making, and shares slid nearly 2% in Wednesday afternoon’s trading.
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Ahead of a new upcoming deadline in the ongoing tariff war, Ford landed that new line of credit, which reports note can be drawn upon at will for a full year. It does, however, have to maintain $4 billion of available cash during that period, noted Securities and Exchange Commission filings. This news comes ahead of the earnings report set to emerge later today.
Ian Thibodeau, Ford representative, noted, “We are further strengthening our liquidity and providing additional financial flexibility.” And while tariffs will certainly hit automakers like Ford, there have been some positive government-related developments for Ford. First, there are no longer penalties for failing to meet fuel economy standards, and emissions regulations in general are currently being “reevaluate(d)” by the Trump administration.
A New Face in Commercial Business
Ford also managed to augment its operations in the Ford Pro line, by pulling in a former executive from immediate rival General Motors (GM). Ford tapped Alicia Boler Davis to run Ford Pro. Davis has over 30 years’ experience in automotive, including technology and customer experience. She will take over from Andrew Frick starting October 1.
Ford president and CEO Jim Farley noted “Alicia’s unique skillset and experiences make her the ideal leader to guide Ford Pro into the next era – accelerating our move into software and services and growing Ford Pro’s already strong profitability. She combines deep automotive and technology knowledge with an entrepreneurial and customer-obsessed mindset. Importantly, she builds high-performance teams and fosters a culture of innovation, speed and smart risk-taking.”
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 three Sells assigned in the past three months, as indicated by the graphic below. After a 2.4% rally in its share price over the past year, the average F price target of $10.14 per share implies 6.59% downside risk.
