Navigating 2023 was no small feat for Ford Motor’s CEO. The company faced significant pressure from the United Auto Workers union for better wages, and its ambitious electric vehicle (EV) initiatives drew skepticism.
However, the tide has turned. Ford successfully negotiated a deal last fall, averting potential strikes, and the latest EV sales data from Kelley Blue Book show promising trends. Although Ford still trails Tesla, its vehicle volumes are moving in the right direction.
Investors have taken note, and the improved outlook has caught the attention of Wall Street analysts, including seasoned market veteran Bruce Kamich.
Kamich, with over 50 years of experience in evaluating stock, bond, and futures markets, recently updated his stock-price forecast for Ford. His insights could be eye-opening for many investors.
Ford Capitalizes on Sales Momentum
Shifting consumer preferences from sedans to trucks and SUVs have played to Ford’s strengths. The Ford F-150, the top-selling full-size pickup truck in the U.S., sold nearly 750,000 units in 2023, outpacing GM’s Chevy Silverado and Stellantis’ Ram pickups. This marked the 45th consecutive year of dominance for Ford’s F-Series pickups.
In the SUV market, while not as dominant, Ford’s Explorer, Escape, and Bronco ranked among the top 20 most popular SUVs in America last year, according to Kelley Blue Book.
Ford’s EV strategy is also gaining traction. The introduction of the Lightning F-150 in 2022 was met with enthusiasm, and despite initial challenges, second-quarter sales were robust. Ford sold 23,957 EVs in Q2 2024, a 61% increase from the previous year and higher than the 20,223 units sold in Q1. Notably, sales of the F-150 Lightning surged 77% to 7,902 units, Mustang Mach-E sales climbed 47% to 12,645, and electric Transit units jumped 96% to 3,410.
For context, Tesla delivered 444,000 vehicles in the same quarter.
Ford’s overall financial performance in Q1 2024 was solid, with total revenue rising 4% year-over-year to $44.4 billion, and earnings remaining stable at 44 cents per share.
Analyst Sets New Price Target for Ford Stock
The strong sales performance has positively impacted Ford’s share price. After dipping below $10 last October due to union concerns, Ford’s stock rebounded, trading above $14 on July 16, marking the highest level since summer 2023.
While the recent rally has excited bullish investors, there are questions about whether Ford’s shares are now fully valued. However, Kamich’s latest analysis suggests there is still potential for further gains.
“Prices have been hammering out a base pattern over the past two years and are now trading above the bottoming 40-week moving average line,” Kamich noted. “The weekly on-balance volume (OBV) line is decent, though I’d like to see more strength. The moving average convergence divergence (MACD) oscillator is slightly above the zero line.”
OBV measures buying and selling pressure, while MACD tracks momentum. Ideally, both indicators should be positive, according to Kamich. “The critical breakout point for Ford is to close above its 2023 highs around the $15.50 area. If Ford can reach and maintain that level, it could pave the way for another upward move.”
Using daily and weekly point-and-figure charts, Kamich set a new price target for Ford. “The daily point-and-figure chart suggests an upside target in the $19 area,” Kamich concluded. “If Ford continues its climb, investors should be prepared for a potential breakout above the 2023 highs.”
Key Takeaways
- Ford’s successful negotiation with the UAW and improving EV sales have positively influenced investor sentiment.
- Strong performance in the truck and SUV markets bolsters Ford’s overall sales.
- Bruce Kamich’s technical analysis indicates further upside potential for Ford’s stock, with a critical breakout point at $15.50 and an upside target of $19.
Conclusion
Ford’s strategic moves and market positioning, especially in the EV sector, have revitalized investor confidence. While challenges remain, the technical indicators suggest that Ford’s stock could have room to grow, potentially offering significant gains for investors who are prepared to ride the wave.