Ford or Tesla? Which is a better stock

By:
on Mar 24, 2022
  • Ford and Tesla are eyeing dominance in the EV sector.
  • Ford has an attractive valuation, while TSLA is expensive.
  • Both are good stocks for investors.

Ford Motor Company (NYSE:F) and Tesla, Inc. (NASDAQ:TSLA) are good stocks for long-term focused investors. Both are backed by strong fundamentals. In its fourth-quarter 2021 results, Ford’s net income jumped to $12.3 billion, compared to a loss of $2.8 billion in the prior year.

An EBIT guidance of between $11.5 billion to $12.5 billion in FY22 was also greater by 15% to 25% compared to FY21. The company is also making inroads into electric vehicles and recently split into electric and auto units in line with the goal.

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Conversely, Tesla has been a household name in the electric vehicle sector, which Ford eyes. Similar to Ford, Tesla overshot the earnings, with an EPS of $2.52 in the fourth quarter of 2021, more than expected $2.36. The company has continued with its EV expansion, with the latest being the opening of a Giga factory in Berlin. 

As to the verdict of which is a better stock, we find little differences to distinguish the two as both make a top choice. But valuation and technical pointers highlight when and how you should invest in the two stocks.

Ford settles at a support zone

Source – TradingView

Technically, Ford is settling at a support zone of $16.68 in a market correction after it topped $25. The stock could drop lower, but a jump from the level is also a possibility based on the market sentiment. The stock also has a low valuation, with a PE ratio of 3.6577, making it a good consideration for long-term focused investors.

TSLA broke from a descending trendline – To go higher?

Source – TradingView

TSLA broke above a descending trendline on March 15 and is now moving higher. The next price target for the stock is at $1,100 and $1,200. However, it met a resistance at around $1,000 and could correct up to the next support of $895 or higher above the level. The only concern with TSLA is its high valuation, with the stock’s PE ratio at 181.64.

Summary

Ford would be a good buy for long-term focused investors, with the low valuation giving it an edge. However, the stock correction is ongoing, and it is good to wait to see if the $16.68 support will hold.

TSLA is equally a good stock, but the high valuation could be a deterrent. Investors should consider a buy after a retracement towards the $895 support as a strong bullish momentum is underway.

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