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By Barron issued a positive comment about Ford Motor (New York Stock Exchange:F) in its latest edition, noting that despite a marked underperformance this year, the Dearborn, Michigan-based automaker is poised to close the gap with Detroit rival General Motors (New York Stock Exchange: GM).
Ford (F) has gained just 7% year to date, while GM (Managing Director) is up more than 29% compared to the S&P 500's ~17% rise (TO SPY).
“It's not very often that one of the two largest U.S. automakers underperforms the other,” By Barron He wrote, adding that the duo are not much different in financial terms, but investors have yet to recognize that.
However, for an underperforming company to close the gap, “only one catalyst is needed,” the publication noted, arguing that capital discipline would be the key to such a transformation.
Early special dividends of up to $2.60 per share, lower spending on electric vehicles, increased focus on quality and hence reduced warranty expenses would also help the narrative.
A booming U.S. auto market will also be a deciding factor: Americans are expected to buy 16 million new cars in 2024, up from about 15.5 million in 2024.
“Putting it all together, cutting the capital budget could be the best sign yet that Ford is getting serious about its stock price. Investors shouldalso,” By Barron argument.
However, according to Seeking Alpha's Quant System, Wall Street analysts, and Seeking Alpha analysts, Ford (F) remains on hold.
South African analyst Manuel Paul Dipold issued a sell rating on Ford (F) this week, arguing that its largest market, the United States, is “stagnant” and that its valuation is cheap only in terms of non-GAAP measures.
