{"id":3959,"date":"2023-05-04T02:33:28","date_gmt":"2023-05-04T06:33:28","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/ford-gets-off-to-a-good-start-in-q1-but-ev-and-cost-reduction-pressures-will-mount-in-2023\/"},"modified":"2023-05-04T02:33:29","modified_gmt":"2023-05-04T06:33:29","slug":"ford-gets-off-to-a-good-start-in-q1-but-ev-and-cost-reduction-pressures-will-mount-in-2023","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=3959","title":{"rendered":"Ford gets off to a good start in Q1, but EV and cost-reduction pressures will mount in 2023"},"content":{"rendered":"
\n

Ford Motor Co.\u2019s stock rose more than 1% on Wednesday, boosted by the auto maker\u2019s $1.8 billion profit in the first quarter, but investors worried about the company\u2019s unchanged guidance.<\/p>\n

Ford
\n F,
\n -0.08%<\/bg-quote>
\n late Tuesday reported first-quarter earnings and revenue that topped Wall Street expectations and kept its yearly guidance intact. <\/p>\n

\n

That unchanged outlook stoked fears of extra pressure on Ford\u2019s second half of the year. Analysts also fretted that the quarter\u2019s standout beat could turn out to be as good as it gets for the auto maker this year. <\/p>\n

\u201cFord\u2019s unchanged 2023 guidance despite a strong beat \u2026. in our view reflects not only large uncertainty around the operating environment for the rest of the year, but also the real risk of earnings deterioration as mix normalizes and pricing declines at Ford Blue, and losses deepen at Model E,\u201d Deutsche Bank\u2019s Emmanuel Rosner said in a note to clients Wednesday, referring to Ford\u2019s traditionally powered-vehicle and electric-vehicle divisions. First quarter was \u201clikely the high watermark.\u201d<\/p>\n

Also read: <\/strong>Ford reopens orders and cut prices for its electric Mustang SUV<\/p>\n

Ford executives are still banking on $2 billion in cost reductions this year, \u201cwhich will now need to materialize in 2H, and we worry about its ability to deliver on these,\u201d Rosner said. There\u2019s also concern about the losses for the EV side of the business, \u201cguided to reach positive contribution margin by the end of this year, but deteriorated considerably in 1Q.\u201d<\/p>\n

The intact 2023 guidance despite the strong beat implies \u201csome pressure in 2H23 from macro uncertainty and pricing-power easing,\u201d BofA Securities John Murphy said in his note. <\/p>\n

Ford\u2019s outlook is for EBIT between $9 billion and $11 billion compares with BofA Securities\u2019s estimate of $10.8 billion and consensus around $9.3 billion, as well as $10.4 billion in 2022, Murphy said. <\/p>\n

Ford executives highlighted that commodity tailwinds will be lower than expected and mostly expected in the second quarter of the year, the analyst said. \u201cAlthough we agree with management\u2019s cautious stance, it appears there is upside to the outlook,\u201d Murphy said.<\/p>\n

Related: <\/strong>Tesla investors\u2019 top questions? This analyst says he has the answers<\/p>\n

First quarter was \u201cstrong\u201d and showed Ford\u2019s resilience against macroeconomic uncertainty and \u201cimproved execution,\u201d Citi analyst Itay Michaeli said. The unchanged guidance \u201clargely reflects macro conservatism,\u201d he said. <\/p>\n

\u201cOverall, we view Q1 as a step in the right direction,\u201d Michaeli said. A \u201cstrong Q1 should increase confidence in Ford\u2019s execution ahead of a (capital markets day) that\u2019s expected to outline Ford\u2019s margin improvement plans in detail.\u201d <\/p>\n

Ford has scheduled an analyst day on May 22. <\/p>\n

See also: <\/strong>GM\u2019s stock is underappreciated, Morgan Stanley says as it lifts rating to buy<\/p>\n

Ford stock, meanwhile, is likely to stay in a range between $11 and $13 \u201cwhile investors grapple with the pace of U.S. price normalization and debate\u201d whether first quarter was a \u201ccyclical peak,\u201d Chris McNally with ISI Evercore said in his note. <\/p>\n

\u201cWe believe Ford\u2019s stock will be supported by 5-6% dividend yield at critical $11 level. We look for more detail around Ford\u2019s EV roadmap \u2026 to be laid out\u201d at Ford\u2019s analyst day on May 22, McNally said. <\/p>\n

Ford shares have lost 18% in the past 12 months, and gained more than 2% so far this year. That compares with a drop of about 1.4% for the S&P 500 index
\n SPX,
\n -0.70%<\/bg-quote>
\n in the past 12 months, and contrasts with an advance of about 7% for the broader index in the year. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Ford Motor Co.\u2019s stock rose more than 1% on Wednesday, boosted by the auto maker\u2019s $1.8 billion profit in the first quarter, but investors worried about the company\u2019s unchanged guidance. Ford F, -0.08% late Tuesday reported first-quarter earnings and revenue that topped Wall Street expectations and kept its yearly guidance intact. That unchanged outlook stoked […]<\/p>\n","protected":false},"author":1,"featured_media":3960,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-3959","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nFord gets off to a good start in Q1, but EV and cost-reduction pressures will mount in 2023 | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Ford Motor Co.\u2019s stock rose more than 1% on Wednesday, boosted by the auto maker\u2019s $1.8 billion profit in the first quarter, but investors worried about\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=3959\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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