F - Ford stock has 33% upside from here: Bernstein analyst

2024-05-27 09:30:16 ET

Ford Motor Co (NYSE: F) is up roughly 20% versus its year-to-date low but a Bernstein analyst is convinced it has significant room still to the upside.

Ford stock could climb to $16

Daniel Roeska assumed coverage of the legacy automaker last week with a “buy” rating and said it shares could climb to $16 which translates to about a 33% upside from here.

The EV segment of known as the “Model e” lost $4.7 billion in 2023. Still, the Bernstein analyst told clients in a recent research note:

While electric execution looms large, we see a clear path to significant operating leverage and ultimately profits for the company’s EV unit.

Ford stock pays a rather lucrative 4.93% dividend yield at writing which makes up for another great reason to own it.

Model e will break even in 2028

Earlier in May, Ford Motor said it swung to a profit in its first financial quarter ( read more ). According to Daniel Roeska:

The iconic automaker continues to enjoy strong profits from its core markets and a policy-driven investment cycle in the United States.

Roeska expects Model e to lose about $5.0 billion in 2024 followed by a decline until eventually the business breaks even in 2028.

He expects to be selling roughly 772,000 units annually of over a dozen electric vehicles by that year. By then, EVs will account for nearly 20% of the automaker’s total sales, the Bernstein analyst concluded in his note on Ford stock.

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