F - Ford: A Hedge Against An EV Market Slowdown
2024-04-02 22:29:17 ET
Summary
- Ford's shares have the potential to continue rallying as negative sentiment regarding EV players doesn't affect the company very much.
- Ford's slowdown in the EV segment is not a major concern due to its reliance on ICE vehicles.
- Ford has a ton of income value for dividend investors, with a stable amount of free cash flow expected in FY 2024.
Shares of Ford ( F ) entered into a new up-leg in November and the current rally, in my opinion, has potential to continue even as the market realizes that EV demand is not going to be as strong as initially expected. Ford said earlier this year that electric vehicle demand is slowing and that it would scale back its production for the F-150 Lightning pick-up truck as a result. However, I see considerable potential for Ford to declare incremental supplemental cash dividends going forward as the company is guiding for at least $6.0B in free cash flow in FY 2024. Ford is also, despite aggressive investments in electric vehicles, highly dependent on the sale of ICE vehicles... which is unlikely to change in the near term. With shares continuing to sell for very competitive earnings and FCF multiples, I believe Ford could be an excellent income investment in FY 2024 even if the EV market underperforms!...
Ford: A Hedge Against An EV Market Slowdown