Ford Motor Company (NYSE:F) appears to be slowing down its efforts to shift to producing more all-electric vehicles (EVs), and one analyst believes that strategy makes sense. This week, Barclays Analyst Dan Levy raised his price target on the automaker but still said Ford shares should be bought.
Levy raised his price target on Ford shares by $1 to $16, but that would still represent a gain of about 27% over the next 12 months from Friday’s closing price. This positive sentiment comes a week after Ford announced that U.S. electric vehicle sales rose 86% year-over-year in the first quarter.
The analyst believes Ford stock can rise despite electric vehicle sales, not because of them.
Electric vehicle sales are increasing
Ford said it sold just over 20,000 electric vehicles domestically in the first quarter, so the big percentage increase reflects a jump from a low base. But it still goes against the industry trend. Total U.S. electric vehicle sales increased 8% year-over-year in the first quarter of 2024, well below the 40% year-over-year growth in the fourth quarter.
Ford is also working to boost sales of electric vehicles it already produces. This week, the company announced it would cut prices on its all-electric F-150 Lightning pickup truck by up to $5,500. This came after the company slowed production of the vehicle to accommodate rising inventories.
Ford’s advantage over its competitors is that the company can be flexible beyond its electric offerings. This includes a growing range of hybrid electric vehicles as well as its Transit utility vehicles. Sales figures for hybrid and Transit vans in the first quarter each set new records.
As demand for electric vehicles has waned, this strategy appears to be working. This is also why the automaker’s stock looks like a good buy at recent levels. With earnings and free cash flow expected to continue rising this year, this analyst conference is a good bet.
Should you invest $1,000 in Ford Motor Company now?
Before you buy Ford Motor Company stock, consider the following:
The Motley Fool Stock Advisor The analyst team has just identified what they think this is The 10 best stocks so investors can buy it now… and Ford Motor Company wasn’t one of them. The ten stocks that made the cut could deliver huge returns in the years to come.
Stock Advisor provides investors with an easy-to-understand roadmap to success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor The service has more than tripled the returns of the S&P 500 since 2002*.
Check out the 10 stocks
*Stock Advisor returns from April 8, 2024
Howard Smith has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
Ford shares are up 27%, according to 1 Wall Street analyst, originally reported by The Motley Fool