Ford Vs. General Electric: The Blue Chip Race Back To $10

Two of the most well-known companies in the United States are trading under $10. Analysts have given both of these companies $10 price targets. Here’s a look at the race to get shares back to the $10 level.

Ford Shares Under $10: Ford Motor Company F has had a rough 2020, with shares down 18%.

The good news for investors could be the company moving forward with new CEO Jim Farley. In his first days, Farley placed emphasis on the company’s strong franchises and growing its electric and autonomous vehicle presence.

The company has spent over $10 billion on building out its electric vehicles business; it's a key focus area for Dearborn. Ford also has highly anticipated releases of the Bronco, Mustang and F-150 on the horizon. 

Benchmark is the only Ford analyst with a price target of $10 or more. The analyst sees third-quarter earnings coming in better than expected and strong demand in China as near-term catalysts.

The analyst thinks Ford could produce earnings per share of 65 cents to $1.15 in fiscal 2021.

Related Link: Ford Reports 25% Rise in Q3 China Sales

General Electric Under $10: Shares of General Electric Company GE are down 38% in 2020, but one analyst sees upside coming from the company’s industrial business and aviation improving.

Goldman Sachs reinstated coverage General Electric shares with a Buy rating and $10 price target earlier this month. GE's industrial story is the key, and the company should emerge stronger after the pandemic, the sell-side firm said. 

The base case for the call is predicated on a vaccine being released over the next 12 months and air travel strength resuming in that time period.

The analyst sees General Electric’s industrial business returning to profitable free cash flow of $1.2 billion in fiscal 2021 and $3.6 billion in fiscal 2022, after an expected loss of $3.2 billion in the current fiscal year.

Goldman Sachs also believes the renewable energy business of General Electric is underappreciated.

Citigroup is the only other analyst with a double-digit target price on General Electric. The firm had a price target of $11 back in April. 

F, GE Share Performance: Shares of Ford are down 50% over the last five years. Shares have traded between $3.96 and $9.58 over the last 52 weeks. The last time Ford shares closed over $10 was July 22, 2019, at $10.02.

Shares of General Electric are down 75% over the last five years. Shares last saw a $10 close on March 5, 2020, they closed at $10.08.

What’s Next For F, GE: Both companies will report quarterly earnings Oct. 28. 

Photo by Dave Parker via Wikimedia.