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Ford Motor Trading at Five-Year High

By:
Alan Farley
Published: May 27, 2021, 13:00 UTC

The automaker will invest more than $30 billion in electric vehicle research and production between now and 2025.

Ford

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Ford Motor Co. (F) is trading at a five-year high on Thursday following a well-received Investors’ Day presentation that unveiled a major turnaround plan to address the company’s electric future. A RBC Markets upgrade has added to growing bullishness, triggering a breakout above March resistance at 13.62. The uptick raises hopes the company will play now catch-up with outsized returns at rivals Tesla Inc. (TSLA) and General Motors Co. (GM).

Shift Into Electric Vehicle Era

The automaker will invest more than $30 billion in electric vehicle research and production and is looking for EV to comprise up to 40% of all sales by 2030. It will invest part of those funds in battery technology, creating Ford Ion Park, which will include “more than 150 experts in battery chemistries, testing, manufacturing and value-chain management, who will boost battery range and lower costs to customers and Ford”.

RBC Capital Markets upgraded the stock to ‘Outperform’ and raised their target to $17 after the event, noting the plan addresses long-term concerns about the automaker’s shift into electric vehicles. Analyst Joseph Spak provided upbeat commentary on the long-term outlook, noting “we have more confidence in financial targets, concerns over BEV strategy were addressed, numbers are likely moving higher, and the stock is still not overly expensive.”

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating based upon 8 ‘Buy’, 1 ‘Overweight’, 11 ‘Hold’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $9.00 to a Street-high $17 while the stock is set to open Thursday’s session about $1.25 above the median $13 target.  There isn’t much wiggle room for traders to book profits in this sleepy configuration but it could mark a major opportunity for long-term investors.

Ford hit an all-time high in the upper 30s in 1999 and rolled into a 9-year decline that ended near a buck in 2008. The subsequent rally stalled in the upper teens in 2011, ahead of persistent downside that cratered to an 11-year low in March 2020. The stock rallied above a massive trendline of lower highs in January 2021, signaling the first uptrend since 2009. However, the advance is now headed toward heavy resistance in the upper teens, limiting upside potential.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

About the Author

Alan Farley is the best-selling author of ‘The Master Swing Trader’ and market professional since the 1990s, with expertise in balance sheets, technical analysis, price action (tape reading), and broker performance.

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