Ford Stock Forecast 2023: Outlook Turns Bearish, Time to Sell?

Ford Stock Forecast 2023: Outlook Turns Bearish, Time to Sell?

Ford Stock Forecast: For the next 24 hours the momentum is bearish. Trade recommendation is a Sell.

Ford Stock Forecast 2023: Ford Motors Stock price is predicted to reach $16 in 2023.

In this article, we will look for the positives and negatives in Ford Motors as an investment for 2023 and try to gauge whether it fits into the buy list for 2023 or not.

Latest Ford Stock Price

The automotive industry is cyclical. 2020 was one of the worst years for the industry, 2021 was one of the best and the clock has turned back to one of the bumpy years in form of 2022. Ford Motor Company stock (NYSE: F) has given negative returns of 34% since January 2022 (as of 11.11.2022).

I believe that one of the biggest problems with companies like Ford Motors and General Motors is that they are in the transitory phase. It cannot keep itself as a pure conventional combustible engine car manufacturing company, nor they are yet producing electric vehicles (EV) to the scale of Tesla Inc. So, Ford Motors is a mixture of both. When things are in transition, a company needs to be looked at with a broad mind to make a better decision for the long term.

In this article, we will look for the positives and negatives in Ford Motors as an investment for 2023 and try to gauge whether it fits into the buy list for 2023 or not.

Ford Motors Stock Performance Chart

  • 5 days:3.6%
  • 1 Month: -0.1%
  • 6 Month: -0.6%
  • YTD: -38.5%

Ford Technical Analysis

Since the start of the 4th quarter, Ford’s share price rallied after touching a low close to $11 and reached closer to $15. however, on multiple occasions, Ford’s share price fell but with a quick reversal, the price has been above $13.

On the 4-hour chart, the 50-day Moving Average (brown line) has been moving below the 200-day MA (red line). On December 5th, 50-day MA converged with 200-day MA for a brief period of time. Ford’s stock price rallied marginally but with the market losing momentum, Ford lost all the gains it made and moved downside toward the old support level. The support at $13.05 is very much critical for Ford when the market opens for the next trading. If Ford falls below it, we may see the price of Ford shared below $12 and searching for new support close to $11.50.

The first level of support for Ford is $14.11 and in order to turn bullish Ford will have to breach this resistance.

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Relative Strength Index

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The Relative Strength Index for Ford is below the resistance at 49.82. The chart above indicates more seller participation than buyers. Ford’s share is predicted to fall further as the RSI movement shows sellers pulling the price down. We may see a reversal only after the RSI enters the oversold territory.

Recommendation: For the next 24 hours the momentum is bearish and the trade recommendation is Sell.

of resistance for Ford is $13.8. In case of a rally and Ford breach this price level, it will face 2nd level of resistance at $14.69.

Ford Stock Forecast 2023: Bear Case

Argo AI will be a black spot in Ford’s history- Back in 2017, Ford pledged $1 billion to an autonomous vehicle start-up Argo AI. The start-up was also backed by Volkswagen. But unfortunately, Ford has decided to shut down the operations in Argo AI. As a result, Ford had to book a $2.7 billion non-tax pre-tax impairment on its investment in Argo leading to an $827 million net loss during Ford’s third quarter.

It also led to a change in Ford’s strategy towards the autonomous vehicle. Argo AI was working on Level 4 advanced driver assistance systems (ADAS) vehicles, but Ford realized that Level 2 or 3 will provide a better consumer experience and Level 4 is still way too far in the future.

It led to not only a wastage of money for Ford but also pushed them back in terms of time

lost for the transition towards the EV segment.

Ford has hit the rock bottom with Q3 FY 2022-23 results- When General Motors reported its Q3 earnings on October 25th, 2022, sales were up 56% YoY with a similar kind of performance in the bottom line, the same was expected from Ford Motors which was about to report results next day October 26th.

But Ford’s results were a complete disappointment. Sales of $39.4 billion rose only 10% YoY and Ford reported free cash flow (FCF) of $3.6 billion only. Ford FCF declined 54% as opposed to GM. Net loss for the quarter of $827 million or –$0.21 per share was another embarrassment.

Agreed that in Q3, impairment cost from Argo investment was a major reason for reporting the loss, but even without throwing that money in the hole, its profit margin shrunk markedly to 4.6% from 8.4%, much lesser as compared to its peer GM’s 9.1. Ford’s market share is also stuck at 4.9% – no change in the last year.

Ford Stock Forecast 2023: Bull Case

Ford is moving in leaps and bounds towards EV- After the inflation Reduction Act was passed in the US in August this year, giving EV buyers tax credits, it just sped up the transition of conventional automakers towards EV production. Ford is also taking the right steps for making a smooth transition.

Ford plans to spend $50 billion till 2026 to grow an electric vehicle division named Model e. Also, it will report results from each segment separately from next year under the Ford+ corporate umbrella. It will help management and investors to dissect the results in terms of progress towards EV transition.

Ford plans to produce 600,000 EVs by end of 2023 and 2 million units by end of 2026 and the good thing is that it has acquired 100% battery capacity for 600,000 and 70% for the target for 2026. Already Ford EVs like the F-150 pickup trucks are selling like hotcakes EV sales zoomed 120% in October YoY. Europe is the second biggest market for Ford and European Union has planned to ban combustible engine cars by 2035 hence it is an opportunity to grab Ford Motors.

Positives from 2022 – True that Ford seems to have touched rock bottom with Q3 results as discussed above, but there were quite some positives. The company did generate enough FCF in the first nine months of 2022 to pass the goal for the whole of 2022. Management had set the target of $5.5 billion to $6.5 billion this year and by the third quarter, the company did generate $6.6 billion.

Albeit disappointing results, the company’s guidance is up to the mark. It expects to grow its operating profits by 15% this year and end 2022 with $10 billion in positive FCF.

Current Headings are about to ease out The major headwind for companies like Ford Motors is the shortage of chip supply. When the company reported second-quarter results, management said it expected $4 billion in additional commodity costs and an additional $3

billion in “inflationary pressures”. The cost increment is not good for the company, but surely it is about to peak by December end.

A positive signal for the same is in current US inflation numbers of October which eased out to 7.7 against expectations of an 8.0 increase YoY. Also, Ford is taking cost-saving measures to come out of the current environment. It increased its F-150 pickup truck for the second time in the last two months and the current price is almost 30% higher than that of the original price in May 2021.

Ford already warned investors that in its third quarter nearly 40,000 nearly finished vehicles could not be sold as they waited for some parts. The silver lining is that it expects these 40,000 and much more vehicles to be sold to dealers in the fourth quarter as Ford’s vehicle demand is very robust, there are problems only on the supply part.

Ford Stock Price Prediction for the next 12 months

Average FORD Stock Forecast for the next 12 Months$15.8
Morgan Stanley$15
UBS Group$10
Bank of America$28
Deutsche Bank$13

Ford Stock Forecast Today

Overall OutlookPartially Positive
1. Market's WisdomNeutral
1a. Market DataPartially Negative
1b. Technical RecommendationBuy
2. Crowd's WisdomPartially Positive
2a. Social Media BuzzNeutral
2b. Social Media SentimentHigher

Conclusion: Rating Ford for Investment in 2023

True that Ford has problems with the business right now, but management has taken some hard steps by closing the chapter of Argo AI and taking the hit. Right now, Ford is trading at 5.3 to 5.6 times its 2022 projected FCF and that is a cheap auto stock to own. Ford’s performance is not as good as that of GM but there is a lot to like in Ford as a stock.

Investors should also consider a dividend yield of 4.5% as a positive aspect of investment in Ford and if the company delivers on its promise of 15% growth in earnings through year-end and beyond and successfully produces 600,000 EVs by end of 2023, it will be cheery on the cake.

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Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Index or Individual Coins. Please consult a registered investment advisor to guide you on your financial decisions. 



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