Ford Motor Company

Ford Motor Company (NYSE: F) is an automobile company. The Company designs, manufactures, markets, and services a full line of electrified passenger and commercial vehicles, such as Ford trucks, utility vehicles, vans, and cars, and Lincoln luxury vehicles. The Company's segments include Ford Blue, Ford Model e, Ford Pro, Ford Next and Ford Credit.

Recent Financial and Business Updates:

• Strong Financial Results: In the third quarter, Ford delivered robust financial performance, with an impressive 11% year-over-year revenue increase, reaching USD 44 billion. Notably, the company reported a substantial net income of USD 1.2 billion, marking a significant improvement compared to the prior year's loss of USD 827 million. Additionally, Ford's adjusted EBIT showcased strong performance, reaching USD 2.2 billion. These achievements spanned various divisions within the company.
• Ford Pro's Success: Ford Pro, a division dedicated to serving commercial customers with vehicles and services, achieved higher revenue, significantly improved EBIT, and an impressive double-digit EBIT margin.
• Resilience of Ford Blue: In contrast, Ford Blue, known for its gas and hybrid vehicles, demonstrated increased revenue, EBIT, and EBIT margin, underscoring the resilience of its product portfolio.
• Challenges and Growth for Ford Model: Ford Model e, specializing in electric vehicles, reported a remarkable 44% surge in shipments and substantial 26% revenue growth during the third quarter. However, the segment grappled with an operating loss due to competitive pressures in the electric vehicle market.
• Financial Strength and Balance Sheet: Ford also exhibited financial stability, boasting USD 4.6 billion in cash flow from operations in the third quarter and a cumulative cash flow of USD 12.4 billion in the first nine months of the year. Adjusted free cash flow for the same periods amounted to USD 1.2 billion and USD 4.8 billion, respectively. The company maintained a robust balance sheet, holding over USD 29 billion in cash and USD 51 billion in liquidity by the end of the third quarter, including a USD 4 billion contingent liquidity facility secured in anticipation of potential business uncertainties.
• Operational Efficiency Enhancements: To further enhance operational efficiency, Ford implemented organizational changes in support of its Ford+ initiative, introducing an end-to-end global industrial system designed to streamline operations across all three auto business segments: Ford Blue, Ford Model e, and Ford Pro.
• Ford Pro's Exceptional Performance: Ford Pro, dedicated to serving commercial customers with gas, hybrid, and electric vehicles, in conjunction with value-added services, demonstrated exceptional performance. It generated USD 1.7 billion in EBIT with an impressive 12% margin on USD 13.8 billion in revenue during the third quarter. The business expanded its market share in the U.S. commercial truck and van market and introduced a new version of the Transit Custom van in Europe. Furthermore, Ford Pro experienced significant growth in software subscriptions and mobile repair orders.
• Ford Blue's Strong Product Portfolio: Similarly, Ford Blue, renowned for its gas and hybrid vehicles, reported a third-quarter EBIT of USD 1.7 billion, marking a substantial 17% increase from the previous year. This division remained profitable across all regions, driven by a robust product portfolio, including the introduction of gas and hybrid versions of the 2024 F-150 pickup. Hybrid vehicle sales witnessed a remarkable 40% surge, with F-150 hybrid volumes surging by 47%, constituting 57% of all Maverick trucks sold. Ford also has exciting plans for future releases, introducing new derivatives of iconic nameplates such as the Ranger Raptor, Mustang GTD, and extensions of the Bronco and Maverick nameplates.
• Challenges and Growth in the Electric Vehicle Segment: Within the electric vehicle segment, Ford Model e reported a remarkable 44% increase in shipments and an impressive 26% growth in revenue during the third quarter. However, the segment recorded an EBIT loss of USD 1.3 billion, attributable to ongoing investments in next-generation EVs and the competitive dynamics of the market.
• Withdrawal of 2023 Guidance: It's important to note that Ford has decided to withdraw its guidance for full-year 2023 operating results due to the ongoing ratification process of a tentative agreement with the United Auto Workers (UAW) and the impact of a UAW strike. Notably, despite these challenges, Ford had already earned USD 9.4 billion in adjusted EBIT through the third quarter, contributing to the full-year guidance range of USD 11 billion to USD 12 billion, which was reaffirmed in late July. Ford anticipates announcing its fourth-quarter and full-year 2023 financial results on February 1, 2024.

Technical Observation (on the daily chart)

The Relative Strength Index (RSI), calculated over a 14-day span, stands at 29.35, currently in oversold zone, signifying the likelihood of either more consolidation or a brief surge soon. Adding to this, the stock presently finds itself positioned beneath both the 21-day and 50-day Simple Moving Averages (SMA), which could function as a dynamic short-term resistance barrier. Now, the stock's price hovers around a crucial support range of USD 9.00 to USD 10.00, with an anticipation of an impending upward shift originating from these support levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Ford Motor Company (NYSE: F) at the closing market price of USD 10.14 as of November 02, 2023. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is November 02, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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