Is Ford on Track to Achieve Its Adjusted EBIT Target by 2029?

Ford Motor Company F exited last year as a structurally stronger company, establishing a solid foundation to achieve its long-term target of an 8% adjusted EBIT margin by 2029, per the company’s fourth-quarter 2025 earnings transcript. In 2025, the company reported an adjusted EBIT margin of 3.6%, and it expects first-quarter 2026 EBIT to remain roughly flat sequentially at 2.3% as it continues to work through the impact of Novelis-related aluminum costs. Ford anticipates a gradual normalization in the second quarter, with a return to its underlying EBIT run-rate level in the second half of the year as volumes stabilize and portfolio optimization initiatives gain traction.

Profitability in the first half of 2026 is expected to face pressure from temporarily elevated aluminum sourcing costs and broader commodity headwinds, though some market factors may provide partial offsets. In the second half, earnings are projected to improve as production volumes stabilize, additional truck capacity comes online, and aluminum supply costs normalize. Overall, the company has indicated that 2026 will likely be weighted toward stronger back-half performance as temporary headwinds subside.

To support its path to an 8% EBIT margin, Ford is increasing investment in its Ford Blue business, including hybrids and new higher-margin products, while moderating the pace of investment in Model e. Although investment in Model e remains significant, the company is intentionally scaling it down to better balance capital allocation. This disciplined investment strategy is designed to position the company over the next several years to sustainably achieve its targeted margin profile. F sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Margin Outlooks of Ford’s Competitors

General Motors Company GM expects its annual U.S. production to increase to an industry-leading two million units in 2026 as it begins producing the Chevrolet Equinox in Kansas, moves Chevrolet Blazer production to Tennessee and adds capacity for the Cadillac Escalade while launching next-generation full-size pickups at the Orion Assembly plant in Michigan. Its warranty expenses are improving, and its EV-related losses are expected to decline. As a result, the company anticipates full-year 2026 adjusted EBIT margins in North America to return to the 8-10% range.

In 2026, Rivian Automotive, Inc. RIVN expects a sizable adjusted EBITDA loss of $1.8-$2.1 billion. The loss reflects higher R&D spending to accelerate its autonomy roadmap, including LiDAR integration, RAP1 chip deployment and limited point-to-point features, along with rising SG&A costs as it expands its sales and service network to support the R2 ramp.

F’s Price Performance, Valuation and Estimates

Ford has underperformed the Zacks Automotive-Domestic industry in the last six months. Its shares have gained 15.4% compared with the industry’s growth of 27.9%. 

 
From a valuation perspective, F appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.31, lower than the industry’s 3.43. 

 
The Zacks Consensus Estimate for F’s 2026 and 2027 EPS has moved up a penny in the past 30 days. The Zacks Consensus Estimate for F’s 2027 EPS has moved down a penny in the past seven days.

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This article originally published on Zacks Investment Research (zacks.com).

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