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Ford price forecast: Morgan Stanley sees a 38% downside

on Nov 30, 2021
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  • Morgan Stanley's Jonas reiterates Ford at "underweight" with a PT of $12.
  • Jon Najarian disagrees with the bearish call on CNBC's "Halftime Report".
  • Shares of the Detroit automaker have more than doubled this year.

Ford Motor Company (NYSE: F) has had a fantastic 2021, with the stock up 125% to date as shareholders cheered focus on producing electric vehicles. But Morgan Stanley warns it’s as far as it goes.  

Adam Jonas reiterates his $12 price target

In a note to investors on Tuesday, Morgan Stanley’s Adam Jonas reiterated his “underweight” rating on Ford with a price target of $12 that represents an about 38% downside from here.

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The analyst expects Ford to be a lower-margin company in the future because the world is switching to electric vehicles much faster than the legacy automaker can scale its EV profitability.

Jonas forecasts Ford to have electrified nearly 34% of its vehicles by 2030. In comparison, the Detroit automaker is targeting 40% of its vehicles to be electric by the end of this decade. Nonetheless, the analyst expects Ford to outsell its rival General Motors in EV sales in the United States this year.

Jon Najarian disagrees with the bearish call

On CNBC’s “Halftime Report”, Jon Najarian disagreed with the dovish stance on Ford and said it was time to ride the wave.

I don’t know how you underweight them with those Lightnings just rolling out now. Jonas talked about the legacy expenses related to pensions ad other deals, but that doesn’t mean they can’t launch an exciting product that everybody wants. Whether it’s the Bronco or the Lightning; both are good reasons to stick with Ford.

His outlook matches Jim Cramer’s, who’s convinced the stock could continue to rally next year. Late last month, Ford reported 51 cents of adjusted EPS for its fiscal third-quarter – nearly double the 27 cents that Wall Street was expecting.