Citi upgrades Ford to buy, sees nearly 30% upside as auto sales outlook improves
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It’s time to buy Ford Motor shares, according to Citi. The bank upgraded the automotive giant to buy from neutral and raised its price target to $16 per share from $12.80. The new target implies upside of 29% from Friday’s close. Analyst Itay Michaeli said his data from the bank’s latest U.S. Vehicle Density Survey shows seasonally adjusted annual auto sales could reach 19 million in the coming years, drastically improving Ford’s risk/reward outlook. “Our latest survey surprised us to the upside,” the analyst wrote. “Simply put, our survey suggests that recent U.S. auto demand resilience isn’t some fluke but rather a genuine increase in wallet share. This goes heavily against consensus thinking.” He also pointed to “possible EV sentiment improvement as Ford’s Model-e unit executes towards H2 margin targets,” as well as Citi’s “view that the current AI wave could trigger greater appreciation for major opportunities within the SW/AI-defined car, which we view as ultimately more critical than the EV HW economics debate.” “We like Ford’s progress and LT strategic thinking around these opportunities. Taken together, we see an opportunity for improved sentiment,” Michaeli said. Ford last month reported stellar first-quarter results , with CFO John Lawler calling them a “peek at what’s possible to generate value and growth.” Still, the stock is up just 6.5% year to date, lagging the S & P 500’s 11.5% advance. F YTD mountain F in 2023 — CNBC’s Michael Bloom contributed reporting.