Nasdaq F Ford

Ford Motor Co. (F) is closing in on a licensing deal for Volkswagen AG’s electric car technology. According to Bloomberg, the US automaker plans to use the technology in a second model targeting the European market. Bloomberg reports that an agreement for the use of the Volkswagen MEB technology could be struck in the next few weeks, citing unidentified sources. The automaker is to use the technology to develop an autonomous car in Cologne, Germany, however, details of the plans are yet to be released. Bloomberg confirmed that earlier this week, Ford announced its intentions to invest $300 million to build a light commercial vehicle in Romania, including an all-electric version. “As we have said previously, there is the potential for a second all-electric vehicle based on the MEB platform to be built at Cologne, and that is still under consideration," said Ford Europe in a statement. Under the stewardship of CEO Jim Farley, Ford has accelerated its electric vehicle plans in recent years. In 2018, it struck a strategic partnership with Volkswagen for the development of commercial vans. The partnership was later expanded to cover electric vehicles and self-driving technology. As part of the push into the electric vehicle space, Ford has already announced plans to build a $185 million battery research lab. The Michigan lab is to be used to develop batteries and cells that are to power Ford’s electric vehicles. (See Ford stock analysis on TipRanks). Following the release of 1Q 2021 financial results, Jefferies analyst Philippe Houchois reiterated a Buy rating on the stock and set a price target of $16. This implies approximately 42% upside potential to current levels. According to the analyst, everything under the automaker's control turned out materially better, going by another EBIT surprise of $4.8 billion. “Management committed to structurally lower dealer inventories in future but higher work-in-progress (incl buffer stocks). Semi-conductor shortage seen as critical test to review supply chains as industry moves to electrification and battery sourcing," Houchois stated. Consensus among analysts on Wall Street is a Moderate Buy based on 8 Buys, 6 Holds, and 1 Sell rating. The average analyst price target of $13.40, implies 19% upside potential to current levels. Ford scores 7 out of 10 on TipRanks’ Smart Score rating system, implying its performance is likely to align with market expectations. Related News: Ford Builds Global Battery Center In Michigan Lyft To Sell Autonomous Driving Division To Toyota For $550M - Report Apple Slapped With $12M Fine In Russia Over Anti-Competitive Practices - Report

Shares of Ford Motor Co. (F) tanked 8.9% in early trading on Thursday despite the automaker delivering first quarter earnings that beat analysts’ expectations. Its stellar performance was overshadowed by a global chip shortage that could drag down the company’s adjusted EBIT by up to $2.5 billion for FY21.

The company has forecast adjusted EBIT to range between $5.5 billion and $6.5 billion in FY21. Earlier this year, Ford said that it expected the global semiconductor shortage to negatively impact annual manufacturing volumes by 10% to 20%.

Ford’s 1Q revenues were up 6% year-on-year to $36.2 billion and came in ahead of analysts’ estimates of $36 billion. The company reported diluted EPS of $0.81 versus a loss per share of $0.50 in the same quarter last year. Analysts were expecting diluted earnings of $0.22 per share.

Ford’s president and CEO, Jim Farley said, “Our team is relentlessly executing our plan to turn around our automotive business so that we can create and deliver the high-value, always-on experience that our Ford and Lincoln customers deserve. There’s no question we’re becoming a stronger, more resilient company.”

To add to the company’s woes in FY21, there was a fire at one of its suppliers in Japan, Renesas Electronics, that will result in Ford losing half of its planned production in 2Q.

While Ford expects that semiconductor supply from Japan will resume by the end of 2Q, it does not expect the chip supply shortage to be completely resolved until 2022. As a result, Ford has forecast a loss of 10% of its planned production in the second half of this year. (See Ford Motor Co. stock analysis on TipRanks)

In all, the company now expects a loss of 1.1 million units of production for FY21.

Following the earnings, Morgan Stanley analyst Adam Jonas reiterated a Sell and a price target of $9 on the stock (21% downside potential). Jonas said in a research note that Ford “has every opportunity to execute a path that could achieve our $18 bull case valuation."

However, Jonas remained bearish about the stock and stated, “Ford’s 1Q was far ‘too good’ to extrapolate while the remainder of the year is ‘too challenged’ to extrapolate. Put it all together and the most favorable auto supply/demand balance in a generation and Ford’s cost cutting efforts are bearing fruit at a critical time for the House of Dearborn.”

Overall, consensus on the Street is that Ford is a Moderate Buy based on 8 Buys, 6 Holds, and 1 Sell. The average analyst price target of $13.79 implies upside potential of about 22.2% from current levels.

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