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Ford shares up despite a 10% hit to U.S. sales in October

By:
on Nov 2, 2022
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  • Ford says its U.S. sales were down 10% (year-on-year) in October.
  • Its F-150 Lightning electric pickup truck still had a record month.
  • Ford shares are now up nearly 20% versus just a month ago.

Ford Motor Company (NYSE: F) says its U.S. sales were down 10% (year-on-year) in October as it continued to wrestle with the supply constraints. Shares are still trading up on Wednesday.

Why are Ford shares in the green this morning?

That price action is entirely predicated on F-150 Lightning – its all-electric pickup truck that had record sales (2,436) last month, as per the press release.

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Year to date, Ford has sold about 47,500 electric vehicles, making up roughly 3.0% of its total sales. Majority of those were Mustang Mach-Es.

A week ago, the Detroit automaker reported a significant loss for its fiscal Q3 and said it had about 40,000 vehicles that were built but not yet delivered due to parts shortage. It expects that inventory to clear up by year-end.

Nonetheless, the legacy car manufacturer reiterated on Wednesday that demand was keeping strong in the face of higher rates, sticky inflation, and fears of a recession. Including response to the monthly sales report that Invezz also covered in October, Ford shares are now up about 20% versus their recent low.

Ford shares have gained about 20% over the past month.

Ford performed much weaker than the industry at large

Overall U.S. sales for the month of October came in at 158,327 versus the year-ago 176,000. Last month was Ford’s second in a row to have taken a year-on-year hit to sales.

It is also noteworthy that Ford Motor Company had a weak October even though the industry at large saw a 9.1% “increase” in sales last month, according to Edmunds.

The news arrives a week after the multinational lowered its full-year outlook for adjusted EBIT but lifted its guidance for free cash flow (adjusted). Ford now expects $11.5 billion in adjusted EBIT and up to $10 billion of adjusted free cash flow this year.

Wall Street continues to recommend buying Ford shares and sees upside in them to $14.63 on average – up another 10% from here.