Ford - Down to $12 for Support!-Wall Street has high expectations for Ford Motor’s first investor day under CEO Jim Farley on Wednesday.
-The company’s stock price has roughly doubled since Farley took control of the company on Oct. 1. That includes a 12.6% increase last week after the debut of the company’s new electric F-150 Lightning pickup truck.
-Investors will be watching the highly anticipated investor event to see if Farley can keep up the momentum. He has promised to provide details his management team’s direction for the automaker.
-Farley’s predecessor, Jim Hackett, was criticized by Wall Street for failing to detail his turnaround plan and having an unclear vision to fix Ford’s operations. Farley’s plan will have to be detailed to appease Wall Street.
-“Since Jim Farley has taken over as CEO, Ford has promised increased transparency and measurable so we can track Ford’s progress and execution,” RBC Capital Markets analyst Joseph Spak said in a note. “We expect those, along with financial targets, to be detailed at the event.”
-One of the main targets analysts want to see is a long-promised 8% global adjusted profit margin target, including 10% in North America and 6% in Europe. The 8% was promised by Hackett as well as his predecessor, Mark Fields, as part of a “2020 vision” that never happened.
-Before the coronavirus pandemic, Ford’s adjusted profit margin was 4.1% in 2019, followed by 2.2% in 2020. Due to an imbalance of supply and demand in new vehicles due to an ongoing global semiconductor chip shortage, it was inflated to 13.3% during the first quarter of this year.
-For comparison, General Motors’ adjusted profit margin was 6.1% in 2019, 7.9% in 2020 and 13.6% during the first quarter of this year.
Wells Fargo analyst Colin Langan expects Ford to reaffirm its long-term margins at the event, and mostly focus on the “future mobility themes” such as electric and autonomous vehicles and data monetization.
