Ford Stock: Is F Underperforming the Consumer Cyclical Sector?

Ford Motor Co_ logo by- Vera Tikhonova via iStock

Ford Motor Company (F), headquartered in Dearborn, Michigan, with a market cap of $41.3 billion, is a global leader in automotive design and manufacturing. Known for its innovation and commitment to quality, Ford offers a diverse range of vehicles, from fuel-efficient cars to cutting-edge electric and commercial vehicles, catering to the needs of individuals, businesses, and industries. 

Companies valued at over $10 billion are typically classified as “large-cap stocks,” a category Ford exemplifies through its substantial market presence and leadership in the global automotive industry.

Ford shares are currently trading 30% below their 52-week high of $14.85, hit on July 18. Over the past three months, the stock has declined 2.2%, underperforming the Consumer Discretionary Select Sector SPDR Fund's (XLY22.7% gain during the same period.

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Over the past 52 weeks, F stock has declined 6.9% and is down 14.8% on a YTD basis, significantly underperforming the XLY, which has gained 34.7% over the past year and 31.2% on a YTD basis.

Ford has been trading below its 50-day and 200-day moving averages since late July, indicating a bearish trend.

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Ford's underperformance stems from margin pressures, flat sales, and challenges adapting to the EV transition amid macroeconomic and supply chain issues.

On Oct. 28, Ford's shares rose over 2% following its Q3 earnings report, which surpassed market expectations. The company delivered revenue of $46.2 billion, a 5.5% year-over-year increase and beating the analyst's estimates of $42.3 billion. Adjusted EPS reached $0.49, slightly ahead of the $0.47 consensus. Notably, free cash flow margin improved to 7.6% from 5.4%, despite sales volumes remaining flat year-over-year. 

Its rival, General Motors Company (GM), is significantly outperforming F, as evidenced by a rise of 56.5% over the past year and 45.6% on a YTD basis.

Analysts are cautious about Ford due to its recent price performance. The stock has a consensus "Hold" rating from 20 covering analysts. It has a mean price target of $11.81, indicating a potential upside of 13.7% from its current level.


On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.