Why Ford Stock Is Up By 9% Today

Ford Stock Rallies As Company Highlights Strong Demand For F-150 Lightning

Shares of Ford gained strong upside momentum after Ford reported that it would “nearly double all-electric F-150 Lightning production to 150,000 units annually”.

Ford also noted that it already had nearly 200,000 reservations for the vehicle, so the demand for F-150 Lightning is very strong. Ford added that more than 75% of reservation holders were new to the brand, which means that Ford may be gaining market share from its competitors.

Interestingly, the market looks concerned about Ford’s impact on the EV leader Tesla, whose shares are down by 4% today. Yesterday, Tesla stock rallied after the company released its Q4 production & deliveries report which exceeded market expectations. However, Tesla trades at an extremely rich valuation so the stock is sensitive to any material news about the success of its competitors.

What’s Next For Ford Stock?

Unlike Tesla, Ford is trading at reasonable valuation levels. Analysts expect that the company will report earnings of $1.99 per share in 2022, so Ford stock is trading at 12 forward P/E compared to 136 forward P/E for Tesla stock.

In this light, Ford stock may attract more value-oriented traders who are willing to bet on the strong growth of the EV segment but are not ready to buy stocks which are valued at more than 100 forward P/E.

For Tesla investors, Ford story is the one to watch closely as Ford may establish itself at the top position of the lucrative EV truck market segment, which may have a negative impact on the valuation of Tesla stock.

It should be noted that traders look interested in stocks of legacy automakers, so shares of General Motors have also enjoyed a strong rally in recent weeks. It remains to be seen whether it will be a “year of the legacy automaker” on the stock market, but it is possible that higher yields will push traders towards value stocks, which will be bullish for Ford and General Motors.

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