Ford: EV Investments Set to Drive Further Growth
Over the next decade the electric vehicle story is expected to unfold, in the process revolutionizing the auto industry as we know it. EV start-ups are popping up like weeds, attuned to this new opportunity.
However, it is not just upstarts looking to ride this secular trend, legacy auto makers have realized where the puck is going and are chasing it down.
Tigress analyst Ivan Feinseth sees one auto giant as exceptionally well-positioned to use this new world order to its advantage, and this will naturally benefit investors too.
“Ford’s (F stock analysis) ongoing rollout of new products along with international expansion and consistent long-term history of returning cash to shareholders will drive greater long-term shareholder value creation. We believe significant upside exists from current levels,” the 5-star analyst said.
By 2030, Ford has set its sights on having 40% of global vehicle production fully electric. To do so, it plans on investing $30 billion over the next 4 years on “significant EV initiatives.”
These include the creation of a global battery center - Ford Ion Park. Here, more than 150 experts will work on ways to “boost battery range and reduce costs.” Its battery tech will be vertically integrated with a vast selection of EV Batteries, such as IonBoost lithium-ion and IonBoost Pro lithium iron phosphate for commercial vehicles. Based on engineering from Ford and Solid Power, the company will also develop long-range, low-cost solid-state batteries.
The company is also setting up BlueOvalSK, a joint venture with South Korea’s SK Innovation, which by mid-decade will produce lithium-ion batteries in two new battery plants in Tennessee and Kentucky
Of course, the new battery tech will go toward the EV offerings and here the company’s new products are getting an enthusiastic reaction and set to be a “key growth driver.”
Ford’s leadership in pickup trucks will see a further boost from the all-electric F-150 Lightning set to become available next spring. “So far,” notes Feinseth, “Reservations for the F-150 Lightning now exceed more than 120,000 units, with 75% being first-time Ford buyers.”
The Mustang Mach-E has also seen “incredible success,” and is now the US’ second-best-selling electric SUV. It was also recently named Car and Driver Electric Vehicle of the Year, leaving the Tesla Model Y Performance, the Porsche Taycan, and the Audi e-tron all trailing behind.
To this end, Feinseth reiterated a Buy rating on Ford stock and has a joint Street-high price target of $20. Investors could see returns of 25%, should the analyst’s thesis go according to plan. (To watch Feinseth’s track record, click here)
So, that’s Tigress’ view, but what does the rest of the Street have in mind for the auto giant? Based on 7 Buys vs. 3 Holds and 1 Sell, the stock has a Moderate Buy consensus rating. After adding 82% of share gains so far this year, in contrast to Feinseth, most analysts think the stock has soared enough; the $16.75 average target suggests shares will stay rangebound for the foreseeable future. (See F stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
