F - Ford Wins As Electrification Stalls

2024-03-09 02:00:00 ET

Summary

• F has outperformed expectations, with the promising FY2024 guidance and excellent supplementary FQ1'24 payouts demonstrating the safety of its dividend investment thesis.
• It is apparent by now that its legacy businesses remain the backbone of the company, with robust consumer demand and expanding profit margins.
• With the moderated EV cash burn well balancing the UAW headwinds, we may see F continue to deliver excellent bottom lines ahead, further aided by the stable balance sheet.
• Combined with the excellent support at current levels and the management's intensified hybrid efforts, the stock has been upgraded as a Buy.

We previously covered Ford Motor ( F ) in December 2023, discussing its uncertain prospects then, attributed to the reduced EV productions through 2024 and the intensified competition from multiple legacy/ start up automakers.

With the moderated EV cash burn negated by the impact of $8.8B in profit headwinds through 2028 from the UAW contracts, we had preferred to prudently reiterate our Hold rating then....

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