Ford keeps flyingFord flew 7% after it unveiling a new compact pickup truck and some impressive sales numbers - the stock is up 35% since the start of May.
Last week, Ford continued its winning streak with a 7% jump that took the stock to its highest price since 2016, on the back of a JP Morgan upgrade and the release of a new vehicle. Prices are now trading at around the $15 mark – highs that investors haven’t seen since May 2016. The new entry-level truck is called Maverick, and is part of the automaker’s plan to offer pickups at a variety of prices as the market becomes more competitive.
Another piece of good news came in the form of a JP Morgan analyst upgrade, probably thanks to the sales numbers released the day before. Ford reported last week that its U.S. sales rose in May despite production issues and chip shortages that have been plaguing automakers. Sales were up 4.1% for the month, a welcome improvement from the sharp decline in May 2020 as COVID ran rampant. Whilst beating last year's numbers wasn't exactly difficult, it was still a surprise given the production challenges that the company has had to face recently – interruptions at key factories in the U.S. coupled with strong consumer demand has left Ford, and indeed a lot of others, in the doldrums as inventories are depleted and the global chip shortage continues.
the JP Morgan analyst, Ryan Brinkman, said about the stock.
Investor day excitmentFord is up over 12% in two days to close at its highest price since July 2016 after its investor day reveals plans to boost electric vehicle investment to $30 billion by 2025.
Shares of Ford jumped up almost 9% on Wednesday on the back of CEO Jim Farley’s first investor day, where shareholders got a look at the company’s impressive new “Ford+'' initiative, which is aimed specifically at increasing profits and expanding into high tech segments. The car maker is also hugely investing in its EV segment, which has recently got a lot of attention for the new electric version of its most popular pickup last week. A part of the new Ford+ plan is for electric vehicles to make up nearly half of all global sales by 2030, and Ford will increase its investment into EVs to over $30 billion by 2025.
said Ford CEO Jim Farley.
Promising partnershipFord stock is absolutely cruising, jumping almost 7% on Friday to close at its highest price in a decade after the automaker announced a new partnership with a South Korean battery maker to support the rollout of the new EV pickup it announced last week.
Ford stock got a boost earlier last week after revealing its brand new Electric Ford F-150 Lightning pickup; and prices shot up another 6.73% on May 21 with the announcement that the rollout would be supported by a new deal with South Korean battery maker SK Innovation. The pair have agreed to form a battery joint venture in the U.S., and have signed a deal to form a new venture together called BlueOvalSK.
Finalized details are likely to emerge later this summer, but so far the plan is for BlueOvalSK to produce around 60 gigawatt-hours (GWh) annually in traction battery cells and array modules – which sounds kinda techy, but is important because Ford’s global EV plan demands a capacity of 240 GWh by 2030, which is when the company hopes to be all-electric. So this deal is a pretty important step in the right direction.
said Jim Farley, Ford president and CEO.
Ford gets Tesla shaking in its bootsThere was once a time when Tesla had a monopoly on the EV space, but competitors like Ford are starting to take back some of that territory. The automaker reveals its new electric pickup ahead of schedule, and Prez Biden is the first to give it a whirl.
Ford gave the world (well, Biden) a sneak peek at its highly anticipated new electric F-150 Lightning pickup earlier than anyone was expecting, during a presidential tour of the Michigan plant that is producing the car. The Ford F-150 has been the best-selling truck in the U.S. for over forty years, so releasing an electric version isn’t just a big deal for Ford - it’s a big deal for everyone. And clearly the new vehicle already has a fan in Biden, who apparently joked that he’d like to lose secret service and take it to the track. He also reinforced his support for the adoption of EVs, and suggested switching government vehicles to EVs such as the F-150.
Biden said during a speech at the plant.
At the rate things are going, that’s looking pretty possible – global EV sales are expected to double in 2021 alone. Currently, electric vehicles only make up only about 3% of global auto sales, but some analysts think that electrics could outsell gas cars by 2040.
One of the first to predict this was obviously Elon Musk’s Tesla, which until recently had a clear lead over its competitors in this space. One teardown of the Model 3 last year estimated Tesla tech to be six years ahead of VW and Toyota. However, Tesla's share of the U.S. electric-car market fell from 81% to 69% in February 2021; a key reason for which was the boom in sales for Ford’s electric Mustang Mach-E.
It’s not just traditional automakers that are making their mark either; smaller dedicated electric vehicle brands like Lucid Motors and Fisker are starting to fight for (and win) their own piece of the market. Lucid Motors was founded with the aim of redefining luxury EVs, competing directly with Tesla’s Model S with its Lucid Air. When you compare the two vehicles, Lucid does a pretty good job of keeping up, scoring higher in five out of six categories (Lucid’s CEO was the chief engineer of the Model S at Tesla, so they’ve got a bit of an inside advantage). Last week, the company gave an analyst day presentation as it cruised towards completing its merger with SPAC Churchill Capital IV in order to go public. Shares of Churchill had been trading downwards for a few weeks, but this update managed to send them back on an uphill journey. Lucid has already sold out all of its $170,000 Air Sedans and total reservations have topped 9,000. In its latest update, Lucid pushed back the close of its SPAC merger, which we can now expect to complete early in Q3 – so watch this space, as we might see some big things coming.
New player Fisker is at the battle too, winning with a strong earnings report and a new delivery agreement with a U.K. based electric car subscription service. This week the firm released its Q1 earnings, which show some promising milestones – although nothing is on sale yet, its first product, called Ocean, is still expected in 2022, and reservations for the car have jumped to 16,000 from 12,000 in the first quarter. Its second car will be produced by well-known Apple supplier Foxconn, and is expected in 2023.
You can almost hear Tesla shaking in its wheels.
Cautious recovery for Ford after disastrous earnings announcementFord is making a cautious recovery this week after the shock announcement in its Q1 earnings of an expected 50% reduction in Q2 production levels sent the share price plummeting by almost 10% on April 29. The stock recovered by around 2.49% the following day however, and has been creeping gradually back up this week.
Ford reported earnings last week with better than expected profits, but it's clear that the global semiconductor shortage is starting to hit where it hurts. The automaker reported adjusted earnings of 89 cents per share on revenue of $33.5 billion and sales of $36.2 billion, versus expectations of 21 cents earnings per share on $32.23 billion revenue.
But even in the face of such a strong earnings beat, there was plenty for investors to be concerned about. The semiconductor shortage has hit the company’s free cash flow, increasing raw material costs and making life pretty hard for automakers, who have had to shutter factories around the globe for varying periods of time – leading to tight vehicle inventories on dealer lots.
Ford burned through around $400 million in Q1 because it finished the period with a load of unfinished cars. Its earnings report warned that the global chip shortage could slash its Q2 production by up to 50% before potentially improving toward the end of the year. Ford updated its full year guidance, which was set at between $8 billion and $9 billion in adjusted pretax profits in February, but has now been adjusted to be between $5.5 billion and $6.5 billion, with adjusted free cash flow for 2021 expected to be between $500 million and $1.5 billion. The semiconductor shortage will cost the company around $2.5 billion in 2021, and is expected to cost the global auto industry $60.6 billion in revenue.
Luckily, lower supplies have also led to higher profits per vehicle, so hopefully the company can continue to perform despite the shortage.