Citi analyst Itay Michaeli raised the firm’s price target on Ford to $16.00 (from $15) while keeping a Neutral rating on the shares. Michaeli enhanced Ford’s encouraging Earnings results for Q2 2022 and also the reiteration of the annual guidance.
“We maintain our Neutral rating following Ford’s encouraging Q2 results and 2022 guidance reiteration, which demonstrated strong execution. We are raising our 2022 EPS estimate while keeping our 2023-2024 estimates largely intact. Our estimates remain above consensus, as we maintain a more positive view of the US auto cycle based on our latest survey work,” the analyst said.
Although the raise by only $1 to $16 per share, Michaeli says the “stock can continue grinding higher” towards the firm’s “revised price target on improved NT sentiment”.
“As a result of our higher estimates and other updated inputs (balance sheet, share count, etc.), our price target goes to $16 from $15. Although we think the stock can continue grinding higher towards our revised price target on improved NT sentiment, we are closing out our prior 90-Day Upside Catalyst Watch call, as we think the main near-term catalysts that we previously identified have been realized”.
“And, while we are comfortable with Ford’s H2 guidance (with upside possible should net price/mix surprise to the upside), we do note that Ford’s US dealer inventory rose at Q2-end, while the H2 outlook appears a bit more Q4 weighted.
Stepping back, we maintain a constructive fundamental view on the story, and particularly look forward to learning more about Ford’s upcoming ICE/EV re-segmentation,” he concluded.
Last week, the automaker reported its Q2 Earnings results beating the estimates with revenue of $40.2 billion and $667 million in net income affirming guidance for 2022 results. Ford expects a EBIT of $11.5 billion to $12.5 billion, up 15% to 25% from 2021 and adjusted free cash flow of $5.5 billion to $6.5 billion.