Nasdaq F Ford
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Ford a Worthy Challenger to Tesla in 2022
Shares of EV pioneer Tesla (TSLA) could continue to fade, as competition in the space takes it to the next level in 2022, with firms like Ford Motor (F) stepping up to bat.
Indeed, Ford stock has been an unbelievable performer this year, with shares up a staggering 89% over the past year in anticipation of what's sure to be a profoundly successful year of electrifying launches.
I do see real opportunity in a stock that's still not as expensive as it could be, given its recent progress and the electrification opportunity, which may not yet be factored into Ford stock's valuation. I am bullish.
While Ford is a more-than 100-year-old company, investors should not ignore the potential for the old timer to catch up to younger rivals. The company may not have the most exciting new brands on the block (many of its vehicle brands like Mustang are timeless). Still, it is carrying a considerable fanbase, which will translate very well as the company looks to flex its muscles in the EV space.
Ford stock outpaced Tesla in a big way last year, a trend I expect will continue in 2022 and beyond. Now a $1-trillion company, Tesla is miles ahead of Ford, which is a less than $100-billion company.
Whether or not Ford can close the gap in what's shaping up to be an exciting EV race remains to be seen. It's not the only old-time auto going after Tesla's crown, after all.
Does Ford Deserve a Tech Multiple?Ford's innovative capabilities could shine through this year, with an impressive electric lineup that's likely to continue enjoying robust demand.
We're entering a time when EVs are essentially computers that take you places. If Ford can keep innovating, I see few reasons why F stock can't command more of a "tech multiple" as the likes of a Tesla.
Of course, it all depends on your point of view. When does an automaker prove that it's deserving of a richer tech multiple?
Perhaps this year will show us more, with many new entrants hungry to break into the space. Given Ford's $8.2-billion Q4 gain on its investment in fellow electric truck maker Rivian (RIVN), it's arguable that Ford's management team knows where the puck is headed next in the fast-moving EV space.
At 0.5 times sales and 36.2 times trailing earnings, Ford stock may either be too cheap, or frontrunner Tesla may be way too pricey. A pretty strong case could be made that both statements are true.
It seems far-fetched to think that Ford can eclipse Tesla's market cap, but if the current trend accelerates over the next few years, can one really rule out such a scenario?
Look for Ford to Continue WinningThe way I see it, the booming EV market is Tesla's to lose.
That said, Elon Musk has shown time and time again that he's ready to compete. At the end of the day, the man's ultimate vision was to accelerate a transition to sustainable forms of transportation.
Whether Tesla holds the crown or not, he's about to accomplish his ultimate goal. Given his recent share sales, I'd argue that Tesla may have to move over and make way for new entrants.
Ford strikes me as a competitor that could have room to run if it's able to execute with its upcoming releases. Early signs suggest Tesla's past successes could rub off on Ford, as it looks to nearly double production on its F-150 Lightning truck. Customer demand is off the charts, and it could continue to be for many years to come.
Wall Street's TakeAccording to TipRanks’ analyst rating consensus, F stock comes in as a Moderate Buy. Out of 18 analyst ratings, there are eight Buy recommendations, seven Hold recommendations and three Sell recommendations.
The average Ford price target is $22.94. Analyst price targets range from a low of $12 per share to a high of $32 per share.
Bottom Line on Ford StockIn short, I think Ford is on-ramping a ton of consumers that would have never gone electric, either due to the high price tag or a lack of appeal in the current offerings, most notably those from Tesla.
Indeed, Ford looks to be putting its foot on the electric pedal heading into the new year, and supply disruptions may not be enough to get it to pull on the brakes.
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