There is an old saying about the advisability of putting all your eggs in one basket. Legacy automaker Ford (F) may not have gone quite that far with it, but it is getting surprisingly close. The F-Series line of pickups accounts for 37% of Ford’s sales, and that has some very concerned about its role in Ford’s operations, and what happens if anything changes here. Ford investors took the hint, and sent Ford shares down modestly in Friday’s trading.
Claim 55% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
Ford’s F-Series is a winner by any measure. Not only does it account for over a third of Ford’s total sales, it also represents the best-selling truck in America for the last 49 years. It also represents the best-selling vehicle period for the last 44 years, reports note. This means that if something ever goes wrong with the F-Series, it is potentially a knockdown blow to Ford itself.
There are potential problems for the F-Series ahead. The ongoing troubles at Novelis are stark enough. The fact that the United States government does not seem particularly interested in offering Ford any kind of tariff relief in light of those troubles is almost worse. All of this, and potentially more, leaves Ford in a very bad place: its biggest seller by a huge margin is having supply troubles. What demand there is cannot be fully capitalized on. Ford needs a new aluminum supplier, and quickly, to augment Novelis and prevent this sort of thing from happening again.
A Better Welding System
Welding is, of course, vital when it comes to automobile manufacture. So when Ford Thailand created a “self-repairing welding system,” it caught its share of attention. Ford’s automated welding systems were already working quite well. But when Ford set out to make them better, it found an unexpected wrinkle that did the job.
Ford fed historical data to artificial intelligence (AI) systems, and in the process, created what is now called Intelligent Welding. Intelligent Welding allowed Ford to better analyze what it was doing with assembly welding, and even managed to get the line to the point where it could repair itself, in real-time. This helped ensure minimal lost time on the line to repair, and opened up new production capacity for Ford.
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, 11 Holds and one Sell assigned in the past three months, as indicated by the graphic below. After a 31.19% rally in its share price over the past year, the average F price target of $13.88 per share implies 14.47% upside potential.
