Ford shares rise as JPMorgan boosts its 2022 EPS estimate to $1.35

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Jan 12, 2021
  • JPMorgan boosted its 2022 EPS estimate on Ford to $1.35
  • Ford sales in the U.S fell 9.8% in Q4 to 542,749
  • Analysts expect that the revenue will rise in 2021 to around $143 billion

Ford (NYSE: F) shares have been moving in an uptrend last several months, and according to technical analysis, there is no risk of the bear market for now. Ford shares could advance above $10 resistance this January, but if the U.S. stock market enters a correction phase, the stock price will be at much lower levels.

Fundamental analysis: Ford sales in the U.S fell 9.8% in Q4

Ford shares are advancing at the beginning of this trading week, and the technical picture implies that the price could rise above $10 this January. The attention of investors is currently focused on the stimulus package, and according to Joe Biden, it will be in the trillions of dollars.

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The economic package will include unemployment insurance and rent forbearance, but the next several quarters will be competitive for the global auto industry. Wall Street’s three main indexes continue to trade near record highs, and Wall Street analysts expect an equity pullback in the near-term.

In the U.S, Ford sales fell 9.8% in Q4 to 542,749 vehicles, which is above expectations, while total retail sales fell 3.4% Y/Y. SUV sales grew 4% to 216,732 units, and the negative news is that truck sales fell by 12.5% to 288,698 units.

“Fourth quarter represented an inflection point at Ford in our transition from cars to a much greater focus on iconic trucks, SUVs, and electric vehicles to better serve our customers. We began to see our strongest evidence of this in December, with retail sales up 5.3 percent with the launch of our new F-150, Bronco Sport and Mustang Mach-E. We are well-positioned to see the benefits of our focused efforts throughout 2021,” said Andrew Frick, vice president, Ford Sales U.S., and Canada.

JPMorgan sees positively Ford’s plan to restructure South American operations. JPMorgan expects that the company will quickly reduce losses in its South American operations, and because of this, JPMorgan boosted its 2022 EPS estimate on Ford to $1.35 (from $1.30 prior).

Analysts also expect that the revenue will rise in 2021 to around $143 billion from this year’s estimated $117.8 billion. Ford’s business has proven stability throughout the Covid-19 pandemic, and the company’s fundamentals remain very good.

At the current share price, this company is not overvalued, but if the U.S. stock market enters a correction phase, the share price will be at much lower levels.

Technical analysis: The first sign of the trend reversal will be if the price falls below the $8 support level

Ford shares remain in the bull market, and the first sign of the trend reversal will be if the price falls below the $8 support level.

Data source: tradingview.com

The critical support levels are $9 and $8; $10 and $11 represent the resistance levels. If the price jumps above $10, it would be a signal to buy Ford shares, and the next target could be around $10.5 or even $11.

If the price falls below the $8 support level, it would be a firm “sell” signal, and the price could fall to $6.

Summary

Ford shares are advancing at the beginning of this trading week, and JPMorgan boosted its 2022 EPS estimate on Ford to $1.35. The technical picture implies that the price could advance above $10 this January, but if the U.S. stock market enters a correction phase, the stock price will be at much lower levels.

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