Ford announces its earnings today. what are you expecting.

Auto stocks are in the doldrums. Investors won’t buy it even if current earnings look strong – rising interest rates and a slowing economy are weighing heavily on their minds.

Ford Motor (ticker: F) will try to put some wind back into the sails of auto-related stocks when the automaker reports first-quarter results on Tuesday night.

For the first quarter, Wall Street is looking for operating profit of $2.5 billion and earnings per share of 42 cents on sales of $39.2 billion. Ford reported operating profit of $2.3 billion and 38 cents per share on sales of $34.5 billion in the first quarter of 2022.

As, or more important, than current earnings will be earnings guidance. In February, Ford management said it expected 2023 operating profit to fall between $9 billion and $11 billion. Analysts currently expect 2023 operating profit of $9.6 billion, at the lower end of Ford’s range. Ford reported 2022 operating profit of $10.4 billion.

General Motors (GM) stock didn’t get a bump when its management raised fiscal guidance for the full year on April 25. GM now expects operating profit for 2023 to fall between $11 billion and $13 billion. In January, management expected operating profit of $10.5 billion to $12.5 billion.

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Shares fell 4% in response.

Investors don’t seem to believe that the strong quarterly numbers will be sustained. There are some good reasons for feeling this way. At the end of the first quarter, 17% of Americans who finance their cars were paying more than $1,000 per month. Two years ago, only about 6% of people who financed cars were making $1,000 a month in auto payments.

Declining affordability threatens new car demand and new car prices. Either factor can have a significant impact on an automaker’s profitability.

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“There may be more downside to Ford’s current upside,” RBC analyst Tom Narayan wrote in a report reviewing automakers’ earnings. “Where we see the biggest risk is Ford expecting they can maintain pricing this year. So far, pricing this year has remained resilient, but we think affordability could become an increasing headwind.”

Narayan rates Ford stock and has a price target of $12 per share, which is slightly below the analyst’s average price target of about $13.40 per share.

Overall, 33% of analysts who cover a company’s stock price buy. The average buy rating for stocks in the S&P 500 is around 58%. A year ago, 48% of analysts covering Ford stock rated the stock a Buy. The headwinds that Narayan described have sapped some of the analysts’ enthusiasm for Ford stock.

Investors seem to feel the same way as analysts. As we head into Tuesday’s trading, Ford stock is down nearly 15% over the past 12 months while

Standard & Poor’s 500

flat f

Dow Jones Industrial Average

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up to about 3%.

The department is hosting a conference call at 5 p.m. ET to discuss the results. They’re going to have to say something to change the prevailing narrative about stock cars.

Write to Al Root at

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