The challenge for iconic automaker Ford (NYSE:F) is, more than anything else, to prove that it’s still relevant. Upstarts like Tesla (NASDAQ:TSLA) have been stealing Ford’s thunder in recent years. And many traders prefer the allure of “hot” stocks over safe, steady F stock.
However, Ford is making aggressive moves to stay current. There’s a new and exciting feature that could be rolled out next year. Plus, an old pickup-truck standby may be getting a makeover (or at least a redesign) in the near future.
Are these initiatives nothing more than a last-ditch attempt from an automotive dinosaur? Or do they signal a fresh reboot of an automaker in rebound mode? Keep this page open as we examine Ford’s fight for relevancy and, therefore, profitability.
A Closer Look at F Stock
But first, a glance at how the shares have fared in recent weeks. For a very long time, F stock was magnetized to the $10 level. Today, that’s a long-term target price as the onset of the novel coronavirus put strong downward pressure on F shares this year.
Ford, and American automakers generally (except for Tesla), didn’t experience a swift recovery from the Covid-19 crash. Just getting F stock back to the $6 level, and then holding it there, was a major struggle for the bulls.
It also doesn’t help that the early-June push to the $7.50 level was promptly rejected. Evidently the sellers are tenacious and the buyers will need a strong push on heavy volume to get F shares back to $10.
Exploring the Explorer
The F-150 pickup truck is Ford’s best-selling vehicle. Even beyond that, it’s the best-selling vehicle in the United States. So, Tesla’s electric vehicles might be buzz-worthy, but for the time being, the F-150 is as American as hot dogs and apple pie.
And for Ford, the F-150 and other F-series vehicles are the automaker’s bread and butter. Believe it or not, 29% of light-truck sales in the U.S. last year were from Ford’s F series. The truck line is lucrative enough for Ford that it enables the automaker to finance other, seemingly more ambitious projects.
But now, Ford is proving that the old F-series can be ambitious too. Fans of the F-150 will get to witness the first major update on the pickup since 2015.
Plus, an even bigger upgrade may be on the way in 2022. That’s when Ford might launch an all-electric version of the F-150. In the long run, that could be bad news for Tesla but great news for Ford’s shareholders.
The ‘Stang Goes Electric – and Hands-Free
Is it possible that Ford is going all in on the electric-vehicle revolution? Plans for an all-electric F-150 suggest that the old carmaker might have some new tricks. And there’s more to the story as an electric-powered Mustang is reportedly in the works.
The proposed launch of the fully electric Mustang Mach-E for later this year is big news. The Ford Mustang is just as iconic and intergenerational as the F-150. It’s known as an old-school muscle car, and the shift to an electric Mustang is a bold but savvy move on Ford’s part.
Yet, that’s not even the headline news development here. What everybody seems to be focusing on is a new feature to be added to the Mustang Mach-E in 2021. It’s known as Active Drive Assist, and it allegedly allows for hands-free driving.
The hands-free feature of Active Drive Assist will supposedly work on approximately 100,000 miles of highways throughout the United States and Canada.
Like the push to make the F-150 electric vehicles available, the advent of Active Drive Assist presents a direct and credible threat to Tesla. For long-term Ford shareholders, there’s now reason to believe that F stock isn’t just a safe investment, but a growth-focused asset as well.
The Bottom Line on F Stock
Ford’s efforts to make familiar vehicle models exciting to new generations of car and pickup buyers are commendable. Whether they’ll be effective remains to be seen.
But at least Ford’s pushing forward and staying aggressive, and that should be encouraging for F stockholders.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David Moadel did not hold a position in any of the aforementioned securities.