Are Ford A Buy As F-150 Lightning deliveries starting?

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Ford engine (F) started the new decade with optimism as it emerged to compete in the era of smart vehicles and clean energy. The automaker is investing heavily in new technologies to keep pace with self-driving vehicles, carpooling and electric cars. But does all this effort make Ford stock a buy right now?




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The unveiling of the Mustang Mach-E in November 2019 was a key step in the company’s pivot to what it called “the digital future”. The Ford Mustang Mach-E, an all-electric crossover, made its commercial debut in the United States at the end of 2020. Ford is starting production of the Mach-E, a competitor of the You’re here (TSLA) Model Y, also in China.

And Ford didn’t stop there — it just delivered its first all-electric F-150 Lightning pickup.

Ford’s investment in electrification helped drive stocks up 140% in 2021. This led Ford to briefly overtake General Motors (GM) in market capitalization for the first time in five years. But where is Ford now? If you are considering buying stocks, it is essential to analyze the fundamental and technical picture first.

Ford continues to sell Rivian shares

Ford sold an additional 7 million shares of its stake in Rivian (RIVN) on May 13. This is in addition to the 8 million sold on May 11. Ford’s stake in Rivian has fallen to just under 10%, or 86.9 million shares. Ford stock sales helped push RIVN shares to new highs, but the electric vehicle startup rebounded.

The Detroit automaker was an early backer of the EV startup, which launched its high-profile IPO last November. RIVN stock quickly rose from an IPO price of 78 to a high of 179.47. But the actions have since fallen back to earth. Rivian stock hit a record low of 19.25 in May and is currently trading above 30, according to charts from MarketSmith.

April sales

Ford’s monthly retail sales fell again in April. Overall, Ford sold 176,965 total vehicles in the United States last month. That’s down 10% from a year earlier as shortages of chips and other supplies weigh on production. Truck sales fell 18% year-over-year to 79,768 units, but SUV sales edged up 2% in the same period to hit a record high in April.

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Ford’s April figures represent an improvement over March as increased production helped boost retail sales. The automaker also reported a one-point increase in market share on improved inventory flow at its dealerships. Improved inventories also boosted sales of Ford’s popular F-Series trucks 14.7% from last month.

The monthly EV sales total also continued to climb last month. Ford sold 16,779 electric vehicles last month, an increase of 139% over the previous year. The Mustang Mach-E model had its best monthly sales period ever with 3,805 deliveries in April. This is an annual increase of 95%.

Ford will soon release May sales in the United States.

Ford Earnings

Ford’s first-quarter profit fell 46% to 38 cents a share excluding items. Revenue also fell 5% from a year ago to $34.5 billion. The automaker saw its net profit weighed down thanks to a loss in valuation of its stake in Rivian. Ford was an early backer of the EV startup and initially benefited from Rivian’s IPO surge. But Rivian stock quickly conceded those gains and is down 70% for the year. Ford executives said April 27 earnings were primarily hurt by a $5.4 billion loss on its investment in Rivian. Ford stock rose slightly after hours.

Operational performance also continued to be hampered by production pauses due to continued chip shortages and supply issues. Whole vehicle shipments were down 9% from a year ago to 970,000 cars. This contributed to lower pre-tax profits in North America and other key markets, including Europe and China.

Ford maintained its outlook for the year despite a bumpy first quarter. Executives forecast full-year 2022 adjusted EBIT of $11.5 billion to $12.5 billion, up 15 to 25 percent from a year ago. CEO Farley also hinted in an April 27 earnings release that there would be changes coming to make the company more profitable as competition intensifies in the electric vehicle market.

“There are big things that we do extremely well, like mass-produce vehicles that are in high demand,” Farley said. “And others, in existing and ambitious areas, where we need to improve – and we will.”

Launch of the electric F-150

Ford officially delivered its first electric pickup truck in late May, although it’s unclear how quickly production and deliveries will ramp up. The F-150 Lightning model received 200,000 reservations when it was first announced last May. Ford held a Lightning production launch event on April 26.

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The truck’s initial $40,000 price put it in competition with the Tesla Model 3 sedan which sells for $48,000. The Elon Musk-led automaker won’t start producing its Cybertruck until at least 2023.

The launch of the F-150 Lightning is considered a pivotal moment in Ford’s turnaround. The automaker has invested billions in its transition to producing electric vehicles.

Last month, Ford announced it would split the company’s EV business and gas engine business as part of a major corporate reorganization. The Wall Street Journal reported that both operations will be kept in-house, “with separate names and their own governance structures and profit and loss reporting.” Ford stock jumped on the news.

Ford’s electric vehicle business will now be called Ford Model E. The other division responsible for Ford’s internal combustion engine business will be known as Ford Blue.

Adds to plans to increase EV spending

The Detroit automaker extended an agreement with volkswagen (VWAGY) which would double European production of electric vehicles to 1.2 million cars by 2023. Ford has also entered into initial agreements with SK Battery and Koc Holding to build an electric vehicle battery factory in Turkey.

These agreements reflect Ford’s growing investment in the electric vehicle market. In February, the automaker increased spending on electric vehicles by $20 billion. This investment was in addition to the $30 billion Ford had already earmarked for electric vehicles through 2025. These investments were followed by the separation of the company’s EV and gasoline units. The reported reorganization will be led by former Apple and Tesla executive Doug Field.

The increase in electric vehicle spending comes amid rising sales of Ford electric models. The company had to close orders for its 2022 Maverick hybrid pickup truck due to overwhelming demand. Orders for the 2023 Maverick will resume this summer.


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Fundamental analysis of Ford stocks

To determine if Ford stock is a Buy Now, fundamental and technical analysis is essential.

The IBD Stock Checkup tool shows that Ford stock has an IBD composite rating of 19 out of 99, the best possible. Criteria.

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Ford stock has a low EPS rating of 19 out of 99. The rating compares quarterly and annual growth in earnings per share with all other stocks. Amid the transition, Ford has a patchy earnings record. The company has reported more than its share of declining quarterly profits over the past decade. However, forward-looking estimates point to growth.

IBD ranks the automaker No. 11 among its automotive industry peers. The automaker group fell to No. 189 out of the 197 industry groups tracked by IBD. It is ideal to focus on the most important stocks found in the top 40 IBD groups.

Ford stock technical analysis

Ford stock jumped 140% in 2021, hitting a long-term high in early January. But stocks have fallen significantly since then, recently hitting their worst levels in nearly a year.

Consider Ford’s relative strength

Ford’s relative strength line – which measures a stock’s price performance against the S&P 500 – has retreated significantly after rising in early 2022.

IBD research shows the importance of focusing on stocks that outperform the market.

Stock Ford: an immediate purchase?

Ford stock rose in 2021 and into the new year, but fell sharply during the recent market correction.

Bottom line: Ford stock is not a buy now.

While Ford is above the 21-day line and a short-term trendline from the past few weeks, it has yet to break a downtrend line connecting its highs of 17.80 and 16.57. . It is also still below a descending 50-day line, and resistance at this moving average coincides with these two previous peaks. Traders should first see if Ford stock can rally and hold above its 50-day line before buying. Even then, the stock will have potential resistance at the 200-day line to contend with.

To find the best stocks to buy and watch, check out IBD’s stock listings page. More stock ideas can be found on our Leaderboard and MarketSmith platforms.

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