F - Ford: Too Many Bad Developments Vs. The Few Bright Spots
2024-07-01 22:13:48 ET
Summary
- The valuation is not as cheap as it seems.
- Ford's most important market, the US, is stagnating.
- Southeast Asia, South America, and Africa may see increased importance in the car market over the next decade.
- Ford has too many bad developments and risks compared to the upside.
Investment Thesis
In my opinion, the risks and negative aspects of Ford ( F ) outweigh the positive potential. After analyzing the company and the market in detail, I find it difficult to find arguments in favor of an investment. The valuation is only cheap if you use the non-GAAP figures. In addition, the company has been stagnating for years, and its most important market, the USA, is also stagnating. There is a lot of competition, which is reflected in meager margins. The tariffs on Chinese vehicles might save the company in the US but will probably only hurt it in all other markets.
Industry Overview
A few days ago, I wrote an in-depth article about Western brands in the Chinese EV market. This article also contains information about the development of the American market, and I think it is highly informative for anyone invested in car manufacturers. Here is a table from the article that shows the sales development of some selected markets over the last ten years....
Ford: Too Many Bad Developments Vs. The Few Bright Spots