Deutsche Bank recommends selling Ford stock after its Q4 results

on Feb 3, 2023
  • Ford reports lower than expected profit for its fourth financial quarter.
  • Deutsche Bank analyst downgraded Ford stock to "sell" on Friday.
  • Shares of the legacy automaker are up roughly 15% year-to-date.

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Ford Motor Company (NYSE: F) had a rather disappointing fourth quarter, which, as per a Deutsche Bank analyst, is reason enough to pull out of this stock.

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Ford’s guidance for the full year

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On an adjusted basis, the legacy automaker earned 51 cents a share in its Q4 that was meaningfully below 62 cents that experts had forecast.

In fiscal 2023, though, Ford said over $2.5 billion worth of cost cuts will help drive an adjusted EBIT of between $9.0 billion and $11 billion. But analyst Emmanuel Rosner is not buying that.

We struggle to wrap our heads around such a considerable expected reduction in materials costs, and Ford didn’t provide any color on tangible restructuring programme that would generate such savings so rapidly.

For the year, Ford stock is up 15% at writing.

Rosner recommends selling Ford stock

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On Friday, Rosner downgraded the car manufacturer to “sell” and trimmed his price objective to $11 a share – about a 23% downside on its previous close.

It [Q4 and guidance], in our view, showcase considerable operational shortfalls and suggest meaningful downside risk to earnings trajectory. We also worry about its limited visibility into its supply base.

According to Ford, its U.S. electric vehicles sales tanked about 33% sequentially in January to 5,247 in total and the Deutsche Bank analyst warns that decline could accelerate further moving forward.

Rosner is bearish on the Ford stock even though the Michigan-based car company announced a special dividend of 65 cents per share last night. You can read Ford Motor’s full earnings release HERE.

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