Buckingham Lowers Ford Price Target Ahead Of Q3 Report

Ford Motor Company F could see its share price go lower as it faces continued sluggish demand overseas and new worries about slowing sales at home, Buckingham Research Group said Tuesday.

The Analyst

Buckingham Research Group’s Joseph Amaturo maintained a Neutral rating on Ford and lowered the price target from $9 to $8.

The Thesis

The lower price target reflects of more cautious expectation for EPS and cash flow in the second half of 2019 and into 2020. (See his track record here.) 

While slowing demand in China and Europe has been noted for some time, “we now have increased concern about U.S. volumes and net pricing, particularly on full size pickups and SUVs,” the analyst said. 

“We are also becoming increasingly concerned about end market demand in many of the markets (Ford) participates in.” 

Another potential overhang for Ford investors are talks with the United Auto Workers, though Amaturo said he’s not expecting a strike at Ford.

The UAW has gone on strike against General Motors Company GM in a walk-off that's now in its second full week.

It appears negotiations between GM and the UAW are gaining momentum, and once a deal there is reached, Ford will likely begin negotiating in earnest with the UAW, the analyst said. 

Ford is scheduled to report third-quarter financial results Oct. 23. 

Best-Worst Case

Buckingham views the worst case scenario for Ford’s stock price as $7, with a top-end best case scenario of $11.

Price Action

Ford shares were down 2.18% at $8.96 at the time of publication. 

Related Links:

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New Car Prices Rise An Anemic 0.6% Year-Over-Year In September As Retail Demand Weakens

Photo by Dave Parker via Wikimedia.