Easily one of the most iconic cars at legacy automaker Ford (F) is the Ford Mustang. Whether gas powered or electric, it is still one of the biggest names in Ford’s collective garage. But sales for the Mustang have been in open decline for some time now, and reasons why are starting to emerge. Investors are less than happy, of course, and Ford shares were down fractionally in Tuesday afternoon’s trading.
In trying to pin down what is prompting the decline in sales on one of Ford’s biggest cars since the Model T, several possibilities emerge. But with sales down over 30% for just the first two months of 2025 so far, it is clear that something has gone very wrong. Rising prices are the immediate biggest culprit; a 2025 Mustang is $3,700 more expensive than its 2024 counterpart, reports note. The GT is up $2,700 as well, and with interest rates on car loans staying high, people are economizing, and that new Mustang is out of reach for many.
Plus, people are increasingly looking for value as well, and the Mustang—a marvelous piece of performance car—just does not do well as a daily driver, getting people from point A to point B, and, as the old joke goes, on the weekends, point C. Throw in growing economic concerns overall, and a car that has very specific appeal just does not hold up well in the midst of an uncertain economic environment.
Is The Dividend Next?
Meanwhile, Ford’s dividend—which has proven a welcome feature for investors—may be next on the chopping block as Ford looks to address tariffs. With Ford profits on the decline, and costs on the way up thanks to tariffs, Ford may not be able to keep that impressive dividend aloft much longer, at least, not in its current form.
Analysts currently, reports noted, look for the dividend to drop from its current $0.15 to $0.12 per share, though even here, further cuts may hit if the tariffs continue for any length of time. Given that Ford’s current guidance does not really bring up the tariff concept much, it is pretty clear that tariffs have not yet been factored in. That means a dividend cut could be not so far behind.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on four Buys, 10 Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 11.63% loss in its share price over the past year, the average F price target of $10.59 per share implies 3.42% upside potential.
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