Ford (NYSE: F) shares have had a wild year.
The iconic American carmaker is down -18% year-to-date, even after climbing more than 92% from its March bottom.
But Deutsche Bank analyst Emmanuel Rosner made a bold call on Ford this week, naming it a short-term “catalyst buy” with a $9 price target – 18% higher than the price as of this writing.
“Ford could materially outperform [third quarter] consensus earnings expectations,” Rosner said in a note. “As the new CEO and a robust product cycle could prompt investors to anticipate a more aggressive turnaround trajectory, helping the stock re-rate higher in the near-term.”
Ford’s new CEO, Jim Farley, took over for Jim Hackett early this month and will be put on the task of leading the iconic brand out of the pandemic, improving margins, and managing an industry-wide transition to electric vehicles.
Farley will hit the ground running as the popular Ford F-150 pickup truck has been redesigned for 2021, which could drive higher-than-expected sales, and an all-electric F-150 is planned for 2022. Ford is also spending more than $11 billion preparing to offer more EV models in the coming years.
Rosner isn’t the only analyst bullish on Ford shares.
Benchmark analyst Mike Ward raised his rating on the embattled automaker’s stock early this week from Hold to Buy, issuing a price target of $10 – 31% higher than Thursday’s close.
“Better than expected North American production, a positive shift in mix, and improving metrics in the auto credit market, in our view, are the primary drivers for better than expected earnings performance in the third quarter,” Ward said in a note.
Ward also pointed out that dealer inventories are lower than normal after the coronavirus pandemic shut down plants which tanked automotive production. That provides a boost for manufacturers like Ford, who sell cars to dealerships, and not to consumers.
The Benchmark analyst also says the management transition underway at Ford is another positive.
When Farley took over the helm, he appointed a new CFO in John Lawler.
“Both Farley and Lawler, in our opinion, will be perceived as significant upgrades by the investment community and both are viewed positively with the Ford organization,” Ward said.