The shares of Ford Motor Co. rose Friday, with Wall Street overlooking a quarterly loss of nearly $ 3 billion and a sales failure to focus on the automaker’s plans to invest more in electric and self-driving cars.
Ford F,
Thursday reported a larger fourth-quarter loss and quarterly sales below Wall Street expectations, but it revealed a better outlook for the first quarter and said it would nearly double its investments in electric and autonomous vehicles.
“We were very encouraged” by this one, Deutsche Bank’s Emmanuel Rosner said in his note on Friday.
The company’s operational performance in the second half of 2020 and the outlook for 2021 suggests that the company can turn a corner on its profitability and cash generation, taking advantage of new and innovated products, strong prices and mix, and global cost savings and efficiency, ”he said.
Ford’s plan to invest in electric cars and self-driving cars rose to $ 29 billion, including $ 22 billion for electric cars through 2025. That shows that CEO Jim Farley is “truly accelerating the company’s transformation towards an electrified and connected future.”
Read: Electric vehicles will make up a larger portion of US retail car sales, Edmunds says
Ford is taking “bolder and more decisive action on EV (and AV),” RBC Capital’s Joseph Spak said in his note. Ford “attracts a GM” and increases investment. This is absolutely necessary. “
Ford’s valuation of approximately $ 45 billion is overshadowed by Tesla Inc.’s TSLA.
$ 800 billion and General Motors Co.’s GM,
$ 79 billion. Tesla, of course, only makes electric vehicles, and GM has pledged to do the same by 2035 and become a carbon neutral company by 2040.
A unifying concern with Ford, however, was the news that production of the new F-150 pickup truck, the No. 1 vehicle sold in the US for decades in a row and a crown jewel of the company, was hampered by a shortage of chips. The company has temporarily cut back on factory services.
Ford led adjusted pre-interest and tax earnings of around $ 7.1 billion and $ 8.1 billion for 2021, which was “reasonable” given the shortage of chips, Morgan Stanley’s Adam Jonas said in a note.
Ford’s stock has earned 40% in the past 12 months, compared to a gain of about 17% for the S&P 500 index. SPX,