Today was not a good day for legacy automakers like Ford (F). It was particularly not a good day for Ford’s primary rival on the field, General Motors (GM). But while GM got sucker-punched and crumpled to the tune of over an 8% loss, Ford got off comparatively light with a modest 2.5% loss. According to a Barron’s report, the decline in share prices was linked to the amount of exposure to Mexico that the various automakers had.
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The higher the exposure, the greater the hit. Ford’s exposure to Mexico is comparatively light, and higher tariffs from Trump would shave somewhere between 1% and 2% off of Ford’s profit margin. However, GM would lose between 2% and 3%. Stellantis (STLA), meanwhile, falls between the two at about 2%.
Of course, Trump is not yet actually in office, let alone able to make any binding decisions. The report points out that Trump threatened a similar tariff back in 2019, only to take it all back once Mexico made a few key concessions. Something like this—particularly surrounding illegal immigrants and Fentanyl shipments—may prove to be the case this time.
Job Cuts All Over
Meanwhile, a recent report from Business Insider took a look at job cuts coming to the carmaker market, and Ford, of course, is not exempt. Ford’s job cuts will be focusing mainly on Europe, particularly in terms of the German and United Kingdom divisions. But Ford is also planning to reduce production at a Cologne plant starting in 2025, as well as an “extended pause” at its Metro Detroit plant producing F-150 Lightning pickups.
The primary connection between not only these layoffs but also those at other companies seems to stem from less-than-brisk demand for electric vehicles, reports noted. Demand is slowing in the United States—a key market for electric vehicles—but also in China and even in Europe. With demand in open decline, that poses a problem for major automakers, who need to order parts in large quantities to take full advantage of economies of scale.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on Ford stock based on four Buys, nine Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 15.06% rally in its share price over the past year, the average Ford price target of $11.29 per share implies 1.67% upside potential.
