Ford (F) Stock Trades Up, Here Is Why

What Happened?

Shares of automotive manufacturer Ford (NYSE:F) jumped 4.6% in the morning session after Piper Sandler upgraded its rating on the company to "Overweight" from "Neutral" and significantly raised its price target. 

The firm increased its price target on Ford's stock to $16.00 from $11.00, suggesting a strong belief in the company's growth potential. This notable shift in sentiment from the analyst followed other positive developments for the automaker. Ford had previously announced plans for an advanced "eyes-off" self-driving system for a future electric vehicle. Additionally, the company had reported that its total sales for the previous year climbed by 6%. Reflecting the bolstered investor confidence, the stock's price reached a new 52-week high during the session.

After the initial pop the shares cooled down to $14.38, up 4.8% from previous close.

Is now the time to buy Ford? Access our full analysis report here.

What Is The Market Telling Us

Ford’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock gained 13.2% on the news that the company reported third-quarter financial results that surpassed analysts' expectations for both profit and revenue. 

Ford posted adjusted earnings of $0.45 per share, 25.4% ahead of the consensus estimate of $0.36. Total revenue grew 9.4% year-on-year to $50.53 billion, also beating forecasts of $46.33 billion. The strong results were supported by a 5.6% increase in sales volumes compared to the same period last year. Investors were also encouraged by improved profitability, as Ford's operating margin expanded to 3.1% from 1.9% a year ago, and its free cash flow margin rose to 10.4% from 7.6%.

Ford is up 7.8% since the beginning of the year, and at $14.38 per share, has set a new 52-week high. Investors who bought $1,000 worth of Ford’s shares 5 years ago would now be looking at an investment worth $1,598.

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