Bernstein raised on Friday its price target on Ford shares to $8.30 (from $7.00) over a “lower tariff impact in 2025” than previously expected.
The new target implies a downside of about 20% based on Thursday’s closing price at $10.44.
The firm maintained the Underperform rating on the stock as it expects a “weaker” second half of the year due to “production cuts and tariff headwinds.”
Late last year, the Detroit automaker announced a cut of 14% on its workforce that would affect factories in Germany and the UK, citing losses caused by weak demand and insufficient government support regarding electric vehicles.
Analyst Daniel Roeska said in a new research note that the first half of the year “drives optimism,” with Ford’s positive first quarter and likely “continued strength” in the second one.
However, commenting on the June-December period, the analyst said it “is already in reverse.”
Ford reported a sharp drop in first-quarter earnings, with revenue totaling $40.66 billion and net income plunging 72% to $552 million.
Automotive revenue came in at $37.42 billion, $1.21 billion above the Wall Street consensus. The company burned through $2.22 billion in cash, the largest outflow since 2021.
Citing uncertainty over the tariff scenario, the company suspended its financial forecast as it reported its first quarter financial results. It expects a $1.5 billion hit from Donald Trump’s 25% tariff on imported vehicles and auto parts.
On the earnings call following the report, CEO Jim Farley mentioned “ongoing cooperation (…) with the [Trump] administration.”
Ford’s domestic production stands at 77%, importing 23% mostly from Canada and Mexico. Reuters reported earlier this month that the automaker was raising prices up to $2,000 for vehicles produced in Mexico after May 2, which includes the fully electric Mustang Mach-E, the Bronco SUV and the Maverick pickup.
Earlier this month, U.S. Commerce Secretary Howard Lutnick said that “USMCA [United States-Mexico-Canada Agreement] parts will not carry tariffs, no change in that approach.”
Daniel Roeska’s note pointed out that “tariff mitigation efforts, BEV production discipline and strong performance from Ford Credit present the company with some options to steer through forthcoming market uncertainty.”
Ford’s EV unit ‘Model e’ reported a first-quarter EBIT loss of $849 million, with the company saying its arm “remains focused on improving gross margins and exercising a disciplined approach to investments in battery facilities and next-generation products.”
Berstein lowered their Ford‘s earnings per share (EPS) forecast by 5.8% to $1.66, citing “a lower tariff impact in 2025 than previously estimated,” as the U.S. is negotiating tariff rates with several countries.
On Friday, Donald Trump wrote on social media that he is “recommending a straight 50% tariff on the European Union, starting on June 1, 2025” causing a market slump across most industries.
The U.S. President added that “there is no tariff if the product is built or manufactured in the United States.”
