Ford Motor (F) is one of the worst stocks in the S&P 500 Thursday, plummeting after the automaker fell short of earnings expectations for its second quarter.
In the three months ended June 30, Ford's revenue increased 6% year-over-year to $47.8 billion, buoyed by a nearly 6% rise in automotive revenue to $44.8 billion and a 19% jump in Ford Credit revenue to $3 billion. Meanwhile, its earnings per share (EPS) decreased 35% to 47 cents.
Pressure on Ford's bottom line was due in part to a $1.1 billion loss in its electric vehicle (EV) segment amid "ongoing industrywide pricing pressure on first-generation electric vehicles and lower wholesales."
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The report also showed that Ford's free cash flow, which is the money left over after operating expenses and spending on assets, climbed 10% from the year-ago period to $3.2 billion.
"Customers exercising 'freedom of choice' made Ford the No. 1 gas, No. 2 electric and No. 3 hybrid vehicle brand in the U.S. and the company remains confident in full-year 2024 results, including increasing effectiveness generating cash," the company said in a statement.
The results were mixed compared with analysts' expectations. Wall Street was anticipating total revenue of $47.8 billion and earnings of 68 cents per share, according to MarketWatch.
As a result of its strong cash generation in the first half of the year, Ford raised its full-year free cash flow forecast. The company now anticipates free cash flow in the range of $7.5 billion to $8.5 billion, up from its previous forecast of $6.5 billion to $7.5 billion.
"Our $1 billion increase to adjusted free cash flow guidance for the year underscores our growing confidence in the business," Ford Chief Financial Officer John Lawler said on the company's conference call. "Our balance sheet remains strong with close to $27 billion in cash and $45 billion in liquidity, providing considerable flexibility in a very dynamic environment."
Is Ford stock a buy, sell or hold?
Wall Street is on the sidelines when it comes to Ford, which isn't too unsurprising given the consumer discretionary stock is down more than 18% in the past 12 months.
According to S&P Global Market Intelligence, the consensus analyst target price for F stock is $14.02, representing an upside of about 20% to current levels. Despite the significant implied upside, the consensus recommendation is a Hold. Analysts may very well revise their price targets lower following the earnings miss.
Financial services firm Bernstein is one of the few bullish firms on Ford stock with an Outperform rating (equivalent to a Buy) and a $16 price target.
Still, Bernstein analyst Daniel Roeska says that Ford investors are looking for better performance from the automaker in upcoming quarters. The analyst also notes that Ford did initiate any stock buybacks in the most recent quarter, which could be concerning to shareholders. "The team clearly believes in its mission, but investors likely need more stepping stones to buy into the strategy if they will not be compensated along the way," he adds.
Bernstein's $16 price target represents sits more than 40% above where Ford Motor stock is currently trading.
Related Content
-
QUIZ: What Type Of Retirement Saver Are You?Quiz What is your retirement savings style? Find out with this quick quiz.
-
Meet the World's Unluckiest — and Entitled — Porch PirateThis teen swiped a booby-trapped package that showered him with glitter, and then he hurt his wrist while fleeing. This is why no lawyer will represent him.
-
Smart Business: How Community Engagement Can Help Fuel GrowthAs a financial professional, you can strengthen your brand while making a difference in your community. See how these pros turned community spirit into growth.
-
Meet the World's Unluckiest — Not to Mention Entitled — Porch Pirate
This teen swiped a booby-trapped package that showered him with glitter, and then he hurt his wrist while fleeing. This is why no lawyer will represent him.
-
Smart Business: How Community Engagement Can Help Fuel Growth
As a financial professional, you can strengthen your brand while making a difference in your community. See how these pros turned community spirit into growth.
-
In 2026, the Human Touch Will Be the Differentiator for Financial AdvisersAdvisers who leverage innovative technology to streamline tasks and combat a talent shortage can then prioritize the irreplaceable human touch and empathy.
-
How Financial Advisers Can Deliver a True Family Office ExperienceThe family office model is no longer just for the ultra-wealthy. Advisory firms will need to ensure they have the talent and the tech to serve their clients.
-
Stocks Slip to Start Fed Week: Stock Market TodayWhile a rate cut is widely expected this week, uncertainty is building around the Fed's future plans for monetary policy.
-
December Fed Meeting: Live Updates and CommentaryThe December Fed meeting is one of the last key economic events of 2025, with Wall Street closely watching what Chair Powell & Co. will do about interest rates.
-
Why Investors Shouldn't Romanticize Bitcoin, From a Financial PlannerInvestors should treat bitcoin as the high-risk asset it is. A look at the data indicates a small portfolio allocation for most investors would be the safest.
-
I'm a Financial Pro Focused on Federal Benefits: These Are the 2 Questions I Answer a LotMany federal employees ask about rolling a TSP into an IRA and parsing options for survivor benefits, both especially critical topics.
