What Happened?
Shares of automotive manufacturer Ford (NYSE:F) fell 5.1% in the morning session after Morgan Stanley analyst Adam Jonas updated his rating on the stock of some of the auto manufacturers. Jonas downgraded Ford from Overweight (Buy) to Equal-Weight (Hold) and lowered the price target from $16 to $12.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Ford? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Ford’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 17.2% on the news that the company reported second-quarter earnings results. Its operating income and EPS missed by a large magnitude due to warranty issues and inflationary pressure on repair costs.
Adding to the pricing pressure, the Ford Model E business recorded a $1.1 billion loss due to industry pricing pressures and wholesale declines. Profitability outlook wasn't encouraging as its full year operating income guidance missed.
On the other hand, Ford blew past analysts' revenue expectations. Overall, this was a bad quarter for Ford.
Ford is down 14.2% since the beginning of the year, and at $10.44 per share, it is trading 28.3% below its 52-week high of $14.55 from July 2024. Investors who bought $1,000 worth of Ford’s shares 5 years ago would now be looking at an investment worth $1,134.
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