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Is it too late to buy Ford stock as shares spike after Q3 results?

on Oct 28, 2021
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  • Ford shares on Thursday rallied more than 8% after announcing its most recent quarterly results.
  • The company announced its FQ3 revenue and earnings Wednesday after markets closed, beating estimates.
  • Ford also reinstated its quarterly dividend of $0.10 per share, implying a forward yield of about 2.38%.

On Thursday, Ford Motor Co (NYSE:F) shares spiked more than 8% after reporting its fiscal third-quarter results. The company announced its most recent quarterly results Wednesday after markets closed, surpassing the consensus for Street expectations. The automaker also reinstated its quarterly dividend of $0.10 per share, implying a forward yield of about 2.38%.

The company posted FQ3 non-GAAP earnings per share of $0.51, smashing the average analyst estimate of $0.27. In addition, Ford’s GAAP EPS of $0.45 was significantly higher than the Street forecast of $0.21, while revenue for the quarter of $33.2 billion, exceeded expectations by $410 million, despite declining by 4.3% from the same quarter a year ago.

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Ford looks exciting

From an investment perspective, Ford shares trade at a compelling forward P/E ratio of 9.04, making the stock an attractive option for value investors. 

In addition, analysts forecast an EPS growth of about 290% this year, before rising at an average annual rate of 79.11%.

Therefore, long-term investors could also be persuaded to invest in Ford shares ahead of its exciting growth story.

The stock has gained more than 97% this year and about 118% over the last 12 months.

Source – TradingView

Technically, Ford shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has rallied to overbought conditions, creating an opportunity for a pullback.

However, with shares yet to retest the trendline resistance, the current bull run could continue for the foreseeable future.

Therefore, investors could target extended gains at about $18.06, or higher at $19.13, while $15.50 and $14.36 are crucial support zones.

Ford could be a multi-bagger

In summary, although Ford shares seem to have rallied closer to the overbought conditions of the 14-day RSI, the stock could extend gains towards the trendline resistance.

Therefore, given the company’s exciting growth prospects and compelling valuation, Ford could turn into a multi-bagger stock if it extends the current rally.