Not so long ago, we heard word that legacy automaker Ford (F) was considering making changes to its dealerships. Focusing less on showing off cars, and more on being hospitable. But with Ford’s numbers for the quarter recently out, there is another call to pare back cars on dealer lots. The idea is taking hold with shareholders, too, as shares were up modestly in Wednesday afternoon’s trading.
A report from Marketwatch revealed that Ford did not do so badly in the third quarter. Nevertheless, it was not looking for great results to come out of the fourth quarter. And that prompted a downward slide that was only somewhat cut off in today’s trading. Indeed, some analysts, like Deutsche Bank’s Edison Yu, were looking at a combination of high inventory costs and high warranty costs as being two of Ford’s biggest problem areas right now.
Others, like Bank of America Securities’ John Murphy, noted that Ford has already made quite a few changes, but expecting them to take hold this quickly is simply a bridge too far. Then, Tom Narayan with RBC Capital Markets came in on a note that we have heard before: dealer inventory. Narayan noted that inventory is high, but it may be able to bring that down. If it can, then there may be more room for Ford to run.
A Game-Changer
But Ford will have little room to reduce its inventory, as it looks to bring out another new model in the Ford Ranger EV. Indeed, current CEO Jim Farley has high hopes for the upcoming electric pickup. Farley referred to the mid-size EV pickup as one of the “most exciting” products he has seen in a while.
This is one of the 2027 models that we have heard about previously, built around a whole new platform that should produce higher-quality electric vehicles at lower prices. While Farley kept details close to the vest, reports noted that the new version should have “…more range, more utility, [and] more usability.”
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on F stock based on six Buys, nine Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 13.47% rally in its share price over the past year, the average F price target of $12.11 per share implies 15.39% upside potential.
