Shares of Ford Motor Co. rose Wednesday after a quarterly earnings beat, with analysts focusing on the unknown side of the business and higher-than-expected 2024 guidance, but they remained cautiously optimistic about the automaker.
Ford Pro, Ford F,
The unit, which handles fleets and commercial customers, “remains a hidden gem within Ford,” UBS analyst Joseph Spaak said in a note on Wednesday, echoing similar sentiments from several others.
Late Tuesday, Ford guided for earnings before interest and taxes of $8 billion to $9 billion from Ford Pro, and about $7 billion to $7.5 billion from Ford Blue, whose unit focuses on conventionally powered vehicles. The company forecast another loss for its Model E electric vehicle unit, between $5.0 billion and $5.5 billion.
Ford Pro's fourth-quarter revenue rose 11% year over year, while Ford Blue's was flat and Ford's Model E revenue rose 4% and came in lower than expected.
“Pro remains a standout and one of the best across the board,” RBC analyst Tom Narayan said in his note.
Ford on Tuesday reported fourth-quarter earnings that beat Wall Street expectations by a wide margin, called for a “strong” 2024, and revealed a special earnings call. The automaker also said it will launch the next generation of electric cars to rival Tesla's future “Model 2.”
The better-than-expected financial shot has done little to turn Ford bears into Ford bulls, at least for now.
Of the 24 analysts covering Ford surveyed by FactSet, 11 have given a hold rating on the stock, nine have rated the stock a buy, and the remaining four have rated it a sell.
However, some upside is expected, along with a positive stock reaction after earnings. Estimates “are likely to rise and confidence around Ford's execution grows,” said Itai Michaeli, an analyst at Citi.
“The Pro is Ford's 'Ferrari' (or the closest thing to it),” said Morgan Stanley's Adam Jonas, but it remains to be seen how long the unit can finance losses in Ford's vertically integrated electric vehicle strategy.
Ford shares have lost about 7% in the past 12 months, which contrasts with gains of about 20% for the S&P 500 SPX..
