Things seem to be going from good to good for Ford (NYSE:F) Stock.
If there is a market downturn, no one has told the Detroit automaker whose shares have risen 6% since Jan.4 and 11% in the last month. The most recent gains take the F-share’s appreciation over the past 12 months to 155%.
As of January 2021, the stock was trading at $ 9 per share. In the course of 2021, the return of Ford for investors beat the winnings reached by rivals General Motors (NYSE:DG), which increased by 41%, and You’re here (NASDAQ:TSLA), which increased by 50% last year.
And as most automakers around the world grapple with an ongoing semiconductor shortage and supply constraints, Ford shares have continued their bullish ascent and are now trading at a level they did not have. achieved for 20 years.
Take a turn
The recovery of the F share comes after years of suffering for shareholders. The company struggled to revamp its operations, moving away from unprofitable sedans and focusing almost exclusively on its best-selling trucks and SUVs. Ford also gambled on electric vehicles, a move that forced the company to spend over $ 11 billion the renovation of its production plants.
The Herculean turnaround effort led to several senior management reshuffles and several CEOs, with the company’s stock price falling 66% between January 2017 and March 2020, when markets sold off as the company sold its share price. ‘a global pandemic has been declared.
At its peak, Ford shares were in penny stock territory at $ 4.24. But now patient investors are being rewarded as Ford successfully exits its multi-year turnaround strategy as a leader in electric vehicles. The company and its current CEO Jim Farley, who took the helm in October 2020, have smartly focused on developing electric versions of some of Ford’s most popular and iconic vehicles, including the F-150 pickup truck and muscle car. Mustang.
Ford recently announced plans to double its annual production capacity of the fully electric F-150 Lightning pickup at 150,000 vehicles per year to meet demand.
Ford’s sales and finances have also hit a milestone in the past year despite a global semiconductor shortage that has hampered other automakers and hurt their production. The company recently announced that its global sales this year fourth trimester totaled 508,451 vehicles, a 27% increase from the previous third quarter and much better than the 3% quarterly decline that Wall Street analysts had expected.
The 11% rally in F-share over the past month is largely due to the automaker’s strong fourth quarter results. Ford’s inventory increased by 22,000 vehicles in December compared to November, due to the global chip shortage. However, investors chose to focus on Q4 sales numbers.
Perhaps most impressive, Ford has beaten its big rival GM to become the second best-selling automaker of electric vehicles behind industry leader Tesla. Ford sold 27,140 of its Mustang Mach-E electric muscle car, eclipsing the 24,828 total sales of GM’s best-selling Chevrolet Bolt electric sedan. Tesla remains largely the leader in electric vehicles, having sold a record 936,172 electric vehicles worldwide last year. But Ford is rapidly gaining market share in the increasingly competitive race to withdraw from the combustion engine.
The electric vehicle market is growth forecast at a compound annual growth rate of 27% by 2026, when sales are expected to reach $ 725.14 billion, according to the market research firm Report link. Ford aims to capture a good share of this market, increasing production capacity of all its electric vehicles to 600,000 units worldwide by 2023 and by introducing new models of electric vehicles that include the E-Transit van.
Ride F Stock to Profits
Ford has turned out to be one of the best turnaround stories in American business and its stock continues to be one of the top performers in the markets today. And, at less than $ 25, stocks are still affordable for most investors.
Although the stock price has risen significantly over the past 12 months, it could rise if the company continues to successfully implement its electric vehicle strategy and exceeds quarterly sales forecasts set by Wall Street. Reference investment bank raised his course target on Ford at $ 29 to $ 24 and maintained its “buy” rating on the stock, saying the stock price has more wiggle room.
The F share is a buy.
At the date of publication, Joël Baglole held a long position in GM. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.