One analyst believes it's a smart move for Ford Motor Company (NYSE: F) to slow down its transition to generating more EVs, or completely electric vehicles. This week, Dan Levy, an analyst at Barclays, raised his price objective for the carmaker and reiterated his recommendation that investors purchase Ford shares.
Even though Levy raised his price objective for Ford stock by $1 to $16, the stock would still see a 27% increase from Friday's closing price in the next twelve months or so.
This upbeat outlook follows Ford's announcement one week ago that sales of its electric vehicles in the United States increased by 86% year over year in the first quarter. Ford stock, according to the analyst, can rise in spite of, rather than because of, those EV sales.
Electric vehicle sales skyrocket Since Ford only sold slightly more than 20,000 EVs in the first quarter of the year in the US, the huge percentage gain is indicative of a strong start from a low point.
However, it defies the industry standard. Compared to the 40% year-over-year rise observed in the fourth quarter of 2024, the overall 8% year-over-year growth in first quarter 2024 EV sales in the US was significantly lower.
As an additional strategy, Ford is aiming to increase sales of its already-made electric vehicles. The business revealed this week that the F-150 Lightning all-electric pickup truck would have a price cut of up to $5,500. That follows the business cutting back on the vehicle's production to counteract increasing inventory levels.
When compared to its rivals, Ford has the upper hand because of its adaptability outside of its electric vehicle division. Among these are the company's Transit commercial vans and an expanding range of hybrid electric vehicles. Both the hybrid and Transit van sales figures for the first quarter were record-breaking.
That approach appears to be fruitful, given the decline in EV demand. It's also the reason why the stock of the carmaker seems like a solid investment at its current price. This analyst's prediction is spot on, as the company is predicted to see greater growth in earnings and free cash flow this year.
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