24/7 Wall St. Insights
- Ford Motor Co. (NYSE: F) stock has far underperformed competitors and the broad market in the past two years.
- There are two main reasons for that.
- Also: Dividend legends to hold forever.
The S&P 500 has been on a run recently, rising 56% in two years. Shares of Ford Motor Co.’s (NYSE: F) crosstown rival General Motors Co. (NYSE: GM) are up 40%. Yet, Ford stock is down 9% in the same period. What happened?
Two things have battered Ford. The first is what it said but shouldn’t have. Management claimed it would invest $30 billion into electric vehicles (EVs) to become the U.S. market leader. In June 2022, it said it would nearly double production of its F-150 Lightning, its EV flagship, to 150,000 in two years. Kumar Galhotra, president of Ford’s Americas & International Markets Group, commented at the time, “With nearly 200,000 reservations, our teams are working hard and creatively to break production constraints to get more F-150 Lightning trucks into the hands of our customers.” Today, Ford sells a few of the pickups a month. By late last year, it had cut that delivery forecast to 1,600 a week for 2024.
The second thing was warranty problems. Ford’s latest earnings announcement included a jump in warranty issues that caused a $800 billion increase. The company had promised better numbers and a large increase in quality after years in which consumers and investors waited.
Ford is a good example of how investors become disappointed in results that management keeps promising and then misses.
Ford Price Prediction and Forecast 2025-2030
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