- Jefferies upgrades Ford to Buy with a new price target of $17.50, up from $14.50.
- The analyst expects Q2 to be the low point, with production recovery and strong U.S. demand driving upside.
- FY adjusted EBIT is forecast at $10.3B, near the top of Ford's guidance range.
A Brighter Outlook for the Blue Oval
Jefferies has turned decidedly bullish on Ford Motor Co., upgrading the stock to Buy from Hold and raising its price target to $17.50, citing expectations for a second-quarter trough followed by a production rebound. The new target implies roughly 20% upside from recent levels, according to people familiar with the matter.
In a research note, Jefferies analysts argued that Q2 will mark the low point for Ford's earnings, with production volumes set to recover in the second half of the year. Healthy U.S. demand, they said, could support higher guidance when the company reports quarterly results later this month. The firm also pointed to improving capital allocation and stronger cash flow as additional catalysts.
Jefferies projects fiscal 2025 adjusted EBIT of $10.3 billion, near the top end of Ford's own guidance range of $9.5 billion to $10.5 billion. The upgrade comes after Ford shares have lagged the broader market this year, weighed down by concerns over EV losses and production disruptions.
"We see Q2 as an inflection point," Jefferies wrote, according to a copy of the note reviewed by Bloomberg. "Production headwinds are fading, demand remains resilient, and Ford is tightening its capital allocation." A Ford spokesperson declined to comment on the analyst's call.
The upgrade adds to a growing chorus of optimism around traditional automakers as supply chains normalize and consumer demand for trucks and SUVs stays robust. However, some caution that Ford's heavy spending on electric vehicles and autonomous driving could pressure margins longer term.
Correction: An earlier version of this article misstated the prior price target. It has been corrected to $14.50.