Key Stats for Ford Stock
- Price Change for Ford stock: -6%
- Current Share Price: $12
- 52-Week High: $13
- Ford Stock Price Target: $11
What Happened?
Ford (F) stock plunged more than 6% on Tuesday after reports emerged that a fire at a major aluminum plant could disrupt production for months. The plant, operated by Novelis in Oswego, New York, supplies roughly 40% of the aluminum sheet used by U.S. automakers.
Ford is Novelis’ biggest customer and relies heavily on aluminum from the Oswego facility for its F-150 pickup truck.
The F-150 is Ford’s top-selling vehicle and a major profit generator. Nearly a decade ago, Ford switched the F-150’s exterior from steel to aluminum to improve fuel efficiency and reduce weight.
“This represents a serious question for the production of F-150 because that’s the aluminum that comes out of Oswego,” said Kaustubh Chandorkar, an aluminum industry analyst, speaking to The Wall Street Journal.
The September 16 fire knocked out a significant portion of the Oswego plant until early 2026. Novelis confirmed operations at the plant’s hot mill won’t resume until the first quarter of next year. The facility produces over 350,000 metric tons of sheet aluminum annually for the auto industry.
People familiar with the matter told the Journal that Ford may warn investors about the supply disruption when it reports third-quarter earnings on October 23.
Ford said in a statement it’s working closely with Novelis and exploring alternatives to minimize production impacts.
Other automakers also use the plant. Toyota, Hyundai, Volkswagen, and Stellantis all source aluminum from Novelis.
Toyota said its supply chain team is addressing the situation with alternate suppliers. Auto parts makers BorgWarner and Lear also saw their shares drop on concerns about ripple effects.
See analysts’ growth forecasts and price targets for Ford stock (It’s free!) >>>
What the Market Is Telling Us About Ford Stock
The market’s sharp reaction to the auto stock shows investors are worried about Ford losing production of its most profitable vehicle at a critical time. The F-150 generates a huge chunk of Ford’s profits. Any disruption to F-150 output directly impacts the bottom line.
Ford has been working hard to reduce costs and improve quality after years of recall issues. CEO Jim Farley recently said Ford faces a cost disadvantage of $7 billion to $8 billion compared to competitors, though the company has been closing that gap.
The aluminum shortage adds fresh uncertainty to Ford’s recovery story as reduced supply could tighten inventories and lift aluminum prices. Even if Ford finds alternative suppliers, the transition takes time and may come with higher costs or quality concerns.
The timing is particularly bad because Ford just reported strong third-quarter sales. Total sales jumped 8.2% year over year to 545,522 vehicles. F-Series trucks sold 207,732 units in the quarter, bringing year-to-date volume to 620,580. That’s 170,000 more trucks than the nearest competitor.
Ford’s electrified vehicle sales also hit a record 85,789 units in the quarter, up nearly 20%. The F-150 Lightning electric pickup posted third-quarter record sales of 10,005 trucks. Expedition SUV sales soared 47% to their best third quarter in 20 years.
But all that momentum could stall if Ford can’t source enough aluminum to build F-150s. The 6% drop in Ford stock reflects investor concerns that supply chain problems will overshadow the company’s improving sales trends.
Ford stock trades at a lower valuation than GM despite recent progress. Barclays analyst Dan Levy noted in September that Ford faces ongoing challenges with quality, recalls, and structural costs that make it tough to justify a higher stock price.
The aluminum plant fire adds another headwind just as Ford was starting to gain traction. For now, investors are hitting the sell button until there’s more clarity on how long production disruptions will last and what the financial impact will be.
Wall Street Analysts Are Bullish on These 5 Undervalued Compounders With Market-Beating Potential
TIKR just released a new free report on 5 compounders that appear undervalued, have beaten the market in the past, and could continue to outperform on a 1-5 year timeline based on analysts’ estimates.
Inside, you’ll get a breakdown of 5 high-quality businesses with:
- Strong revenue growth and durable competitive advantages
- Attractive valuations based on forward earnings and expected earnings growth
- Long-term upside potential backed by analyst forecasts and TIKR’s valuation models
These are the kinds of stocks that can deliver massive long-term returns, especially if you catch them while they’re still trading at a discount.
Whether you’re a long-term investor or just looking for great businesses trading below fair value, this report will help you zero in on high-upside opportunities.
Click here to sign up for TIKR and get our full report on 5 undervalued compounders completely free.
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
