Ford Stock Split: Will Ford Announce A Split in 2023?
Latest Ford Stock Price
Ford Motors Inc has been one of the oldest companies to trade on the NYSE since Jan 17, 1956. It is diversifying with the need of the hour and has been proactively producing EVs. It has a history of stock splits with the first one announced in 1962 and the last one coming in 1994. It is now nearly 30 years since the last stock split was announced.
Ford Stock Split History
|Date||Ratio||Price (Close)||Price the day before|
|July 6, 1994||2:1||28.87||57.87 (July 5)|
|Jan 13, 1988||2:1||39.37||79.38 (Jan 12)|
|Jun 3, 1986||3:2||54.25||80.75 (Jun 2)|
|Dec 2, 1983||3:2||41.50||62.88 ( Dec01)|
|Jun 27, 1977||5:4||46.75||57.63 (Jun 24)|
|May 31, 1962||2:1||–||–|
Ford Motors has announced 6 stock splits since its listing on the NYSE. However, after 1994, the company has yet to announce the stock split. Ford has mostly announced the stock split when the stock value was above $50. Currently, Ford is trading below $20 and the chances of the company announcing a split are slim.
Ford Stock Split: A series of splits between two decades
Ford announced the first split in 1962 and the second split came after 15 years in 1977. But, the company announced five splits in less than 17 years, between 1977 and 1994. It is seen from the above table that in a span of five to six years, Ford has announced a stock split in those two decades. But, now it has been almost 28 years since the last split, and management is muted on this topic.
Read: Ford Stock Forecast
Ford Stock Split: Mixed Reaction Post Split
Generally, it is seen that split does create a sentimental value in investors which gives a positive push to the share value in the short term. The same is seen with the stock split of Apple Inc, Amazon Inc, Tesla, and various other companies. But the same is not the case with Ford Motors. Its stock split has not drawn a positive reaction from the general public post-split.
The share price post-split moved higher only on two occasions (1986 and 1977) (adjusting price beyond the split ratio). It moved lower on three occasions (1983, 1988, and 1994) (adjusting price beyond the split ratio). It moved lower even by 1.00% on the next day after the 1983 split. From the above point, we can conclude that stock splits have not been very successful for Ford Motors
Ford Stock Split: Will Ford Motor Announce in 2023?
While stock split cannot be predicted in advance and is solely the decision of management. It needs to be approved by the board of directors in a shareholder’s meet. But the chances for another stock split in the near future, especially in 2023 are very bleak.
There are reasons for the same are:
- The first and foremost is the share price of the company. The primary reason and logic behind the stock split is to make it more affordable to retail investors so that it finds a place in their portfolio. For example, Amazon Inc recently announced the 20:1 share split when its share prices touched $3000, to make it look “cheaper” for retail investors. But the same is not the case with Ford Motors. Its share price is below $20 and there is no point in reducing the share price by announcing the split as it is already affordable for the investors.
- An additional factor opposing the possibility of a future share split is drawn from historical instances. Ford has only undertaken stock splits when its share prices have exceeded the $50 threshold in all past occurrences. Notably, back in 1988, Ford Motors initiated a stock split when share prices reached as high as $80. In contrast, the present share price falls significantly below the $50 mark and there is no anticipation that it will reach such levels even within the next few years.
Ford Motors Earnings (Last 4 Quarters)
|(USD)||Sept 2023||June 2023||Mar 2023||Dec 2022|
|Net profit margin||2.7%||4.5%||4.24%||2.93%|
|Net change in cash||1.2B||1.28B||-2.98B||3.62B|
|Cost of revenue||37.5B||37.4B||36.94B||40.03B|
Can FORD Stock reach $50 in 2023?
After the second quarter, Ford revised its projections for the entire year upwards. The automaker possesses substantial resources to support its shift towards electric vehicles (EVs), all the while ensuring returns for shareholders. Notably, Ford aims to allocate between 40% to 50% of its adjusted free cash flow to benefit shareholders.
Ford Motors Stock reached a peak of $25 a year ago. However, demand for new and used cars has fallen in 2022 as the Federal Reserve increased rates from the middle of the year. Economic and sales recovery may resume this year but it is unclear when that would be the case. Should there be a rapid recovery, FORD could reach $25 this year and $30 in 2024. The probability of this, at least with the information we have, is low. But more likely, a more narrow recovery would begin this and perhaps peak in 2025. This is likely to take it $50 and beyond.
Ford Latest News
- Hyundai Motor Group has surpassed General Motors and Ford in terms of electric vehicle (EV) sales in the United States for the third quarter of 2023. According to data from InsideEVs, Hyundai Motor Group sold a total of 61,865 EVs in the US during Q3, while GM sold 56,414 EVs and Ford sold 46,671 EVs.
- Ford and Sydney Sweeney have partnered with Dickies to introduce a new workwear line. Building on the success of their initial collaboration earlier this year, the workwear collection experienced high demand, with key items selling out in under 36 hours. The popularity led to a restock to meet consumer demand.
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