Ford stock outlook as CEO vows to scale up EV production in brand reinvention

By:
on Dec 10, 2021
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  • Ford shares on Friday spiked more than 5%.
  • The company CEO James Farley said Ford will have to scale EV production to compete with Tesla.
  • Farley said the company will re-invent the brand as it goes electric.

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On Friday, Ford Motor Co (NYSE:F) shares rocketed more than 5% after CEO James Farley said the company will scale its electric vehicle productions in order to compete with the industry leader Tesla Inc. (NASDAQ:TSLA). Farley told CNBC Ford will reinvent the brand as it goes electric. 

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He also discussed Ford’s 12% stake in the electric truck and van manufacturer Rivian Automotive Inc. (NASDAQ:RIVN), saying that the company’s positive IPO reception creates exciting opportunities for Ford. However, Farley did not rule out Ford liquidating some of its shares in Rivian to fund other opportunities.

Ford targets an EV production capacity of 1 million, with the CEO also stressing the importance of producing profitable vehicles to remain competitive in the EV space.

It could be time to bet on Ford’s growth

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From an investment perspective, Ford shares trade at attractive trailing 12-month and forward P/E ratios of 29.42 and 10.58, respectively. Therefore, it could be a compelling option for bargain hunters.

On the other hand, analysts expect its earnings per share to grow by 290% this year before rising at an average annual rate of 77.67% over the next five years.

Therefore, the stock could also gain the interest of long-term growth investors.

Source – TradingView

Technically, Ford shares seem to be trading within a highly volatile sideways channel formation in the intraday chart. Therefore, the stock has recently bounced off the trendline support to surge towards the trendline resistance pushing it closer to overbought conditions.

Investors could target potential pullbacks at about $19.33, or lower at $18.62. However, given the current bullish outlook, it could soar towards $20.93 and $21.66.

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