Key Stats for Ford Stock
- Price Change for $F stock: 3%
- Current Share Price: $12.5
- 52-Week High: $12.80
- $F Stock Price Target: $11.50
What Happened?
Ford (F) stock is up over 2.5% after the automaker reported third-quarter earnings that crushed Wall Street expectations, even as it lowered full-year guidance due to a supplier fire disrupting production of its most profitable vehicles.
The Detroit automaker earned $0.45 on an adjusted basis, beating estimates of $0.36. Automotive revenue hit $47.19 billion, crushing expectations of $43.86 billion. Total revenue, including its financial arm, reached $50.5 billion, a quarterly record and 9% increase from a year ago.
Net income jumped to $2.4 billion from $900 million in the year-ago period. Adjusted earnings before interest and taxes came in at $2.6 billion, level with the prior year but including a $700 million adverse impact from tariffs during the quarter.
The guidance cut stems from a fire last month at a New York plant operated by aluminum supplier Novelis. Ford expects the fire to cost between $1.5 billion and $2 billion, but plans to mitigate much of that impact by ramping up manufacturing once supplies become more available.
Ford now expects 2025 adjusted EBIT of $6 billion to $6.5 billion, down from $6.5 billion to $7.5 billion.
Adjusted free cash flow guidance dropped to $2 billion to $3 billion from $3.5 billion to $4.5 billion, while capital spending remains at roughly $9 billion.
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 positive reaction to Ford stock shows that investors are looking past the near-term supply disruption and focusing on the business’s underlying strength.
CFO Sherry House said without the supplier fire, the automaker was planning to raise 2025 guidance to more than $8 billion in adjusted EBIT rather than cutting it.
RBC Markets analyst Tom Narayan called the guidance change “effectively” a raise when backing out the supplier fire and changes in tariff costs. That’s the right way to think about Ford stock right now. The core business is performing better than expected, and the supplier issue is temporary.
Ford announced plans to “significantly increase” U.S. pickup truck production, including adding 1,000 workers early next year at plants in Michigan and Kentucky.
It expects the additional production next year to recoup about half of the 100,000 units it expects to lose this year due to the fire.
Ford stock got another boost from reduced tariff exposure. The company lowered its expected tariff costs by $1 billion to roughly $2 billion, half of which it expects to offset through other actions.
The reduction came from changes by the Trump administration, including exemptions and the extension of tariff offsets on American-made vehicles.
The total cost of the fire to Ford’s business is now expected to be less than $1 billion by next year, which is manageable for a company that generates more than $8 billion in adjusted EBIT annually when operating normally.
Ford said there was no material impact on third-quarter results from the fire, but it will hit fourth-quarter results.
Ford’s third-quarter performance was led by its “Pro” commercial and fleet business, which reported EBIT of nearly $2 billion, up $172 million from a year earlier. The commercial truck and van business remains incredibly profitable and shows no signs of slowing down.
The traditional “Ford Blue” operations reported EBIT of $1.54 billion, demonstrating that the core combustion engine business is healthy.
However, the “Model e” electric vehicle business widened losses by $179 million year over year, bringing total losses to $1.41 billion.
That’s still a problem area for Ford stock, but the company’s strategy of scaling back EV investments and focusing on profitable vehicles is the right call.
House told the media that “our performance in the quarter shows that the Ford+ plan is delivering consistent improvement. Our underlying business becomes stronger, more efficient, more agile and increasingly durable.”
The Ford+ plan is Farley’s turnaround and cost-improvement initiative, launched more than five years ago. It remains on track to cut $1 billion in costs this year as part of the plan.
Ford stock is up 24% year-to-date, and the third-quarter results show the business momentum is real despite the temporary setback from the supplier fire.
The company’s ability to quickly ramp up production once supplies stabilize demonstrates operational agility that investors appreciate.
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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!
