Ford named new Top Pick in U.S. autos at Morgan Stanley

Morgan Stanley lists four reasons why Ford is the analyst’s new Top Pick in U.S. autos in a new note to investors. A “major change in strategy and investor perception has gripped the global auto industry” and the firm believes Ford understands that its current EV strategy that was largely conceived in 2021/2022 is “likely not sustainable,” the analyst tells investors. While progress will be measured over multiple quarters, the firm is confident that Ford can “act to mitigate the source of value destruction” and calls slower EV adoption a positive for Ford. Capital efficiency is “a far higher priority” and ‘ given the scale of Ford’s investment and operating losses in EVs, investors have severely discounted, and possibly overlooked, the underlying free cash flow generating “gems” within the company, such as Pro, the broader F-150 franchise and specialty segments such as Transit, Bronco, Mustang, Raptor, Ford Credit and others, the analyst added. The analyst, who keeps an Overweight rating and $15 price target on Ford shares, says “capital discipline and shareholder return at Ford can put our $21 bull case in play.”