Ford's stock struggled in 2024 due to missed earnings, EV losses, and competition

From Nasdaq: 2024-12-12 09:13:00

Ford has struggled in 2024, with shares down 15% while GM gained 45%. Ford’s earnings missed estimates, with a 25% net income drop and reduced EBIT forecast for 2024. Its EV business, warranty costs, and competition pose challenges, especially with Trump’s threat to repeal the EV tax credit.

The Ford Model e unit reported a $4.7 billion loss in 2023, with a projected $5 billion loss in 2024 due to pricing pressure and increased EV investments. Ford’s slow EV adoption faces tough competition from Tesla, Toyota, and Honda, impacting its market share and profitability in the EV segment.

High warranty expenses of $2.3 billion in Q2 2024, coupled with inflation, offset cost reductions, impacting Ford’s financial performance. Trump’s proposed 25% tariff on Mexican and Canadian imports could disrupt its production costs, affecting vehicle prices and further challenging its profitability and competitiveness.

Ford’s weak ROIC and declining earnings estimates for 2024 and 2025 reflect its lack of a competitive edge. The uncertain path to recovery, with ongoing EV losses, quality issues, and rising costs, makes Ford a risky investment. Investors should await signs of operational improvement before considering Ford stock.

Zacks ranks Ford as a Strong Sell, signaling caution for investors. The company’s struggles with profitability and competition highlight the need for concrete improvements before considering investment. Stay informed with Zacks Investment Research for the latest updates and recommendations on Ford and other stocks.



Read more at Nasdaq: After a Lousy 2024, Can Ford Stock Turn Around its Fortunes in 2025?