What a difference 14 months can make. Last March, Ford Motor Company (NYSE:F) appeared to be in deep trouble. Ford shares had already been on a five-year decline. Amid the pandemic, the stock market crash, a C-Suite shakeup, and worries it was missing the boat on electric vehicles, F dropped to around $4. Ford’s debt was downgraded to junk status. Today, Ford is like a different company. It has an EV-focused turnaround plan and two of the hottest EVs on the planet. With all eyes on EV companies, analysts are upgrading F, and shares are up about 80% so far this year.
Ford stock isn’t perfect. It has a “B” rating in Portfolio Grader, reflecting factors like the company’s sizeable debt. There are also risks in the car business, ranging from a global shortage of computer chips to the potential for rising interest rates making car loans less affordable. However, for the first time in decades, Ford feels like it is undergoing a resurgence.
F stock at the $16 level is a five-year high, but I suspect that a year from now, we’ll be looking back at it as cheap.
At May’s investor day event, Ford outlined a new turnaround plan. The company is going all-in on electric vehicles, and is expecting to spend $30 billion on developing new EVs and related technology by 2025. Ford is projecting that 40% of its sales will be EVs by 2030.
After years of focusing on hybrids instead of EVs, this is a major change in direction. And it’s one that is expected to pay off for Ford investors.
Must-Have EVs From Ford
Ford customers are lining up for the new Bronco, the company’s modern take on its iconic sport utility vehicle. That’s good news, of course. However, what really has Ford, car-buyers, and investors alike excited are the company’s two new EVs.
The Mustang Mach-E is an all-electric, crossover SUV version of the company’s popular muscle car. Going electric and adopting an SUV form factor (from a two-door sports car) were big risks, with fears that loyal Mustang buyers would be alienated. However, the Mach-E is turning into a big success story for Ford.
For an example of just how popular the Mustang Mach-E is, look at Norway. That country is the world’s top EV market, with over 60% of new vehicles sold there now being battery-powered. All the big EV players are represented in Norway. In May, Norwegian buyers registered 1,384 Mustang Mach-Es. That made Ford’s first fully electric vehicle the top-seller, taking 10% of total car sales in that country.
The F-150 Lighting will be even more important for Ford. The battery-powered version of its pickup truck is due to be released in 2022. The F-150 pickup truck is Ford’s top-selling vehicle and critical to the company’s bottom line. It’s been called the greatest “profit machine in the history of the industry.” Pickup trucks dominate U.S. auto sales, accounting for five of the top 10 best-selling vehicles in 2020. Ford’s F-150 took top honors as the best-selling vehicle in America — for the 39th straight year.
The all-electric F-150 Lightning is a make-or-break vehicle for Ford. And by all signs, it is going to be a hit. Within 48 hours of pre-orders being opened, Ford took nearly 45,000 reservations for the new pickup truck.
Analysts Like What They See
You would have had a tough time rounding up analysts with a positive view on Ford’s prospects at this time last year. However, the company is winning them over with its EV plans.
In a May industry note, Wedbush analyst Daniel Ives pointed to a $5 trillion market opportunity over the next decade for the EV sector as the Auto industry undergoes one of its biggest transformations since the 1950s. With incentives like President Joe Biden’s administration’s “green tidal wave,” Wedbush is projecting today’s 3% EV sales market share to become 10% in 2025, and 20%+ by 2030.
At the end of May, after hearing Ford’s turnaround plan, RBC Capital analyst Joseph Spak upgraded Ford stock to “Outperform” with a $17 price target. Shares have continued to surge since then, and that seemingly aggressive 12-month price target is already within reach.
Bottom Line on Ford Stock
An investment in Ford stock is taking advantage of a green wave hitting an immutable force. Americans will never give up their pickup trucks, muscle cars, or SUVs. At the same time, the pressure is on to electrify. Ford is positioned to leverage the American love for gas-guzzling vehicles to become a global leader in EV sales. If the company can execute — and the reviews of the Mustang Mach-E are definitely pointing in that direction — then F-stock’s performance in 2021 may be just the beginning.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier, who has been called “one of the most important money managers of our time,” has broken the silence in this shocking “tell all” video… exposing one of the most shocking events in our country’s history… and the one move every American needs to make today.