Ford Motor Company F is among the very few legacy automakers that have positioned themselves for a seamless transition into electric vehicles.
On Thursday, the shares of the automaker received price target boosts from two sell-side analysts.
The Ford Analysts: Wells Fargo Securities analyst Colin Langan maintained an Overweight rating on Ford shares and hiked the price target from $19 to $25.
Barclays analyst Brian Johnson reiterated an Overweight rating and raised the price target from $18 to $23.
The Ford Thesis: Ford's global units will likely grow by 9% year-over-year in 2022, with North America outperforming with a 16% growth, Wells Fargo analyst Langan said in a note. This is in line with Ford's outlook for 10% growth, globally, the analyst added.
Wells Fargo is modeling operating improvement in every region, but for a $1.4-billion drop in profits of the Ford Credit business due to non-recurrence of market-to-market gains, the analyst said.
Volume increase, positive geographic mix and cost saving stemming from South American and India restructuring benefits will offset commodity cost and Rivian Automotive Inc RIVN first-quarter market-to-market gains.
Related Link: Ford Has Sights Set On Eventually Toppling Tesla As The No. 1 EV Maker
Wells Fargo maintained its 2021 earnings per share estimate of $1.90 and raised its 2022 and 2023 EPS estimates by 10 cents each to $2.30 and $2.70, respectively.
The upward price target adjustment, according to the firm, is to give effect to the raised 2022 EPS estimate and a higher valuation multiple.
"The increased multiple reflects our more optimistic view of the multiyear auto recovery," Wells Fargo said.
The firm also said it prefers Ford over General Motors Company GM, given the restructuring benefits.
F Price Action: Ford shares were up 3.05% at $20.81 Thursday morning at publication.
Related Link: Ford Analyst Says 'Significant Turnaround' Is Underway At The Detroit Automaker, Upgrades Stock
Photo: Ford F-150 Lightning EV courtesy of Ford
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