Ford’s European Production to Take the Brunt of Macro Issues – Report

Beyond the years-long global chip shortage issues, more recently, the conflict in Ukraine is weighing upon the business of many sectors, including the auto industry. More specifically, a Reuters report has argued that the Ford Motor Company (NYSE: F) in Europe has taken a significant hit due to escalating production challenges. 

Ford Motor is a global automobile company and is one of the largest car manufacturers in the United States. The company is engaged in designing, manufacturing, and selling cars, trucks, and automobile parts. Shares of the company have risen 29.56% over the past year. 

Current Production Issues

Due to the global chip shortage, the automaker’s vehicle production and orders in Europe have been impacted, for which the company has decided to keep its Saarlouis and Cologne, Germany plants idling.

Consequently, Ford has halted receiving orders for the Spanish produced S-Max and Galaxy car models, though it expects to deliver existing orders through September. 

Furthermore, due to the same supply chain disruptions, Ford has downgraded its Focus model’s dashboard screen from 13.2 inches to 8.

Additionally, the company is missing necessary components at a partnered Poland Volkswagen plant due to the war in Ukraine. Therefore, the production of Ford’s Tourneo Connect vehicle, which is built there, has been temporarily stopped. 

Ford commented, “We continue to monitor the situation on a daily basis in conjunction with our partners at VW and will have more to say on this at a later date.” 

Wall Street’s Take 

Recently, Morgan Stanley analyst Adam Jonas maintained a Sell rating and a price target of $13 (21.12% downside potential) on Ford. 

Jonas estimates for Ford to produce less than half a million units in the Fiscal Year 2026, compared with management’s target of more than 2 million units in the same year. 

The rest of the Street is cautiously optimistic about the stock, which has a Moderate Buy consensus rating based on seven Buys, six Holds, and two Sells. The average Ford price target of $23 implies 39.56% upside potential. 

Estimated Monthly Visits 

TipRanks’ website visits tool, which uses data from SEMrush Holdings (NYSE: SEMR), offers insight into Ford’s performance.  

According to the tool, the Ford website recorded 7.23% and 12.31% decreases in global estimated visits in January and February, respectively, on a sequential basis. Also, year-to-date website growth, compared to year-to-date website growth in the previous year, came in at a decline of 12.34%. This, in turn, indicates that the company’s revenues and profitability might disappoint going forward.

Conclusion 

Consistent production issues are likely to impact the growth plan of Ford, which is aggressively investing in its nascent EV segment. This news is most likely not welcomed amongst the stock’s long-term investors.

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