Should I buy Ford shares after Barclays raised its price target to $16?

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 Mar 25, 2021
  • Ford reported that U.S. sales declined 14.1% in February
  • Barclays upgraded Ford shares and assigned the price target of $16
  • Ford's newest products could be game-changers in the electrified vehicle and SUV space

Ford (NYSE: F) shares have been moving in an uptrend last several months, and according to technical analysis, a positive trend remains intact. Ford reported that U.S. sales declined 14.1% in February, but despite this, Barclays upgraded Ford shares and assigned the price target of $16.

Fundamental analysis: U.S. sales declined 14.1% to 163,520 vehicles in February

Ford shares have found strong support above $11, but the Covid-19 pandemic continues to impact its business. The company reported recently that U.S. sales declined 14.1% to 163,520 vehicles in February.

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According to the report, car sales dropped by more than 65%, SUV sales weakened by 10.2%, while truck sales decreased 3.6%. Another negative news is that European Union car registrations dropped more than 19% last month, and for now, everything indicates that we would not see recovery soon.

The positive news is that sales of hybrids reached a new record in February, and some analysts say that Ford’s newest products could be game-changers in the electrified vehicle and SUV space.

“The all-new F-150 PowerBoost Hybrid and the fully electric Mustang Mach-E lifted Ford to an all-new February electrified vehicle sales record. The all-new Bronco Sport and Mustang Mach-E worked to deliver our best February retail Ford SUV sales in 20 years,” said  Andrew Frick, vice president of sales in the U.S. and Canada.

This March, Ford announced that it would continue to support its electric operations in Spain by building a new 2.5-litre Duratec hybrid engine. The Valencia Engine Plant will complete this engine by the end of 2022 year, while the company also announced its plan to build a new vehicle in Mexico.

Last week, Barclays upgraded Ford shares from equal-weight to overweight and assigned the price target of $16. “Ford will likely shift much more aggressively than the consensus believes toward BEVs in the 2025-2030 period, and Ford will likely highlight at its Spring Investor Day a BEV strategy centered around two dedicated BEV platforms,” Barclays reported.

Ford shares could advance again above the $13 resistance level; still, if the U.S. stock market enters a more significant correction phase, the share price could be at much lower levels.

Technical analysis: Ford shares remain in a buy zone

Data source: tradingview.com

Ford shares have weakened from their recent highs above $13 registered in the third week of March, and the current price stands around $12.30. The critical support levels are $11 and $10; $13 and $14 represent the important resistance levels.

If the price jumps again above $13, it would be a signal to buy Ford shares, and the next target could be around $14, but if the price falls below the $11 support level, it would be a firm “sell” signal.

Summary

Ford reported that U.S. sales declined 14.1% in February, but despite this, Barclays upgraded Ford shares and assigned the price target of $16. Ford shares have weakened from their recent highs above $13 registered in the third week of March, but if the price jumps again above $13, the next target could be around $14.

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