Ford Faces Continued EV Losses and Profitability Concerns

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Ford Faces Continued EV Losses and Profitability Concerns

Ford Motor Company is currently trading at $10.36 per share. The company anticipates facing up to $5.5 billion in losses from its electric vehicle and software operations throughout 2025, a repeat of losses seen last year. Additionally, Ford's overall profitability is expected to decline this year in comparison to 2024. This projection is partially due to quality issues and potential repercussions from changes in U.S. policy, according to Reuters.

Recent strategic changes include Ford's decision to cancel plans for a new three-row electric SUV, choosing instead to offer it as a hybrid model. This shift could result in a possible $1.9 billion writedown, as reported by the Financial Times. Furthermore, Ford has adjusted its earnings guidance for 2024 downward, citing high warranty costs and slow progress in cost-cutting measures. This announcement led to a 6% drop in Ford's stock price, according to AP News.

Despite these challenges, some analysts suggest Ford's stock might be undervalued. Nasdaq notes the stock's forward sales multiple of 0.26 is below its five-year average, and its price-to-cash flow ratio stands significantly lower than the industry average. Morningstar has rated Ford's stock as a 4-star 'undervalued' investment, with a fair value estimate raised from $19 to $20 per share.

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Ford Faces Continued EV Losses and Profitability Concerns

Ford Faces Continued EV Losses and Profitability Concerns

Ford Motor Company is currently trading at $10.36 per share. The company anticipates facing up to $5.5 billion in losses from its electric vehicle and software operations throughout 2025, a repeat of losses seen last year. Additionally, Ford's overall profitability is expected to decline this year in comparison to 2024. This projection is partially due to quality issues and potential repercussions from changes in U.S. policy, according to Reuters. Recent strategic changes include Ford's decision to cancel plans for a new three-row electric SUV, choosing instead to offer it as a hybrid model. This shift could result in a possible $1.9 billion writedown, as reported by the Financial Times. Furthermore, Ford has adjusted its earnings guidance for 2024 downward, citing high warranty costs and slow progress in cost-cutting measures. This announcement led to a 6% drop in Ford's stock price, according to AP News. Despite these challenges, some analysts suggest Ford's stock might be undervalued. Nasdaq notes the stock's forward sales multiple of 0.26 is below its five-year average, and its price-to-cash flow ratio stands significantly lower than the industry average. Morningstar has rated Ford's stock as a 4-star 'undervalued' investment, with a fair value estimate raised from $19 to $20 per share.