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Ford (F) Q2 Earnings Preview: Time to Buy the Stock Now?
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Ford (F - Free Report) is slated to release second-quarter 2024 results on Jul 24, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and automotive revenues is pegged at 62 cents per share and $41.65 billion, respectively.
The earnings estimate for the to-be-reported quarter has remained stable over the past 60 days. The bottom-line projection indicates a year-over-year contraction of 14%. The Zacks Consensus Estimate for quarterly revenues suggests a modest year-over-year decrease of 1.8%.
Image Source: Zacks Investment Research
For the current year, the Zacks Consensus Estimate for F’s automotive revenues and EPS is pegged at $167 billion and $2.02, respectively, implying a year-over-year uptick of 0.5% each.
In the trailing four quarters, this U.S. legacy automaker surpassed EPS estimates on three occasions and missed on the other, with the average earnings surprise being 49.26%.
Our proven model does not conclusively predict an earnings beat for Ford this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ford’s second-quarter results are likely to get a boost from strong US sales. The company delivered 536,050 vehicles in the June quarter, up 0.8% from the year-ago period. Trucks comprised 57.6% of total sales volumes. Ford sold 308,920 trucks, including pickups and vans, marking its best second-quarter performance for trucks since 2019.
While internal combustion engine vehicles declined 0.8% year over year, electric and hybrid vehicles witnessed an uptick of 61.4% and 55.6%, respectively. In fact, Ford was the #2 EV brand in the country in the second quarter, just behind Tesla (TSLA - Free Report) and topping its crosstown rival General Motors (GM - Free Report) . Ford sold 23,957 EVs in the second quarter of 2024 in the United States. In terms of models, sales of Mustang Mach E, F-150 Lightning and E-Transit totaled 12,645, 7,902 and 3,410 units, up 46%, 77% and 96%, respectively. Notably, F-150 Lightning remains America’s top-selling electric truck and E-Transit is the nation’s best-selling electric van.
Here’s a rundown of the estimates for Ford’s revenues and EBIT for key segments for the three months ended Jun 30.
The Zacks Consensus Estimate for revenues from the Ford Blue unit (comprising ICE and hybrid models) is pegged at $24.1 billion, implying an increase of 11% sequentially but a decline from $25 billion reported in the corresponding period in 2023. The consensus mark for the segment’s EBIT is $2.34 billion, suggesting an uptick from $905 million and $2.31 billion recorded in the first quarter of 2024 and the second quarter of 2023, respectively.
The Zacks Consensus Estimate for revenues from Ford model e unit (comprising of electric vehicles) is pegged at $813 million, implying an increase from $115 million recorded in the first quarter of 2024 but a decline from $1.83 billion in the corresponding period in 2023. The consensus mark for the segment’s loss before interest and taxes is $1.28 billion, narrower than $1.32 billion in the last reported quarter but wider than $1.08 billion in the year-ago quarter.
The Zacks Consensus Estimate for revenues from the Ford Pro unit (encompassing commercial vehicles and services) is pegged at $16.8 billion, implying a decrease of 7.2% sequentially but an increase from $15.6 billion reported in the corresponding period in 2023. The consensus mark for the segment’s EBIT is $2.25 billion, suggesting a decline from $3 billion and $2.39 billion recorded in the first quarter of 2024 and the second quarter of 2023, respectively.
Price Performance & Valuation
Year to date, Ford has outperformed the industry, sector and S&P 500.
YTD Price Comparision
Image Source: Zacks Investment Research
From a valuation perspective, Ford is trading relatively cheap. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.34, way below its high of 0.77 over the last five years. It is also trading at a discount compared to the industry’s 1.53. The company has a Value Score of A.
Image Source: Zacks Investment Research
Evaluating Ford’s Potential
Ford’s growth prospects are driven by a strong vehicle mix, notably F-series trucks and SUVs, and a robust EV lineup, including Mustang Mach-E, E-Transit and F-150 Lightning. The Ford Blue segment shows significant potential with popular models like the F-150, Maverick, Bronco, and Mustang. Ford Pro’s bright future is supported by strong order books, rising demand and the successful Super Duty launch. In a strategic shift, Ford recently announced plans to expand Super Duty production at its Oakville plant, originally intended for EV crossovers, due to the high demand and profitability of its trucks.
Despite anticipated losses in the Ford Model e unit this year, its long-term outlook is promising. Ford’s EV segment is poised for robust growth through scaling, digital manufacturing efficiencies and vertical integration. We remain optimistic about the Ford+ plan, focusing on profit growth, e-mobility and customer satisfaction. High liquidity of around $43 billion (at the end of the first quarter of 2024) provides a solid foundation for investment in Ford+ priorities.
Last Word
No matter the outcome of Ford’s upcoming earnings report and the stock’s subsequent movement, it remains a solid long-term investment pick due to its strong fundamentals. Despite currently being only 6% off its 52-week high, the stock remains attractively valued. Investors should consider parking their cash in Ford at its current discounted levels for solid long-term returns.
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Ford (F) Q2 Earnings Preview: Time to Buy the Stock Now?
Ford (F - Free Report) is slated to release second-quarter 2024 results on Jul 24, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings and automotive revenues is pegged at 62 cents per share and $41.65 billion, respectively.
The earnings estimate for the to-be-reported quarter has remained stable over the past 60 days. The bottom-line projection indicates a year-over-year contraction of 14%. The Zacks Consensus Estimate for quarterly revenues suggests a modest year-over-year decrease of 1.8%.
For the current year, the Zacks Consensus Estimate for F’s automotive revenues and EPS is pegged at $167 billion and $2.02, respectively, implying a year-over-year uptick of 0.5% each.
In the trailing four quarters, this U.S. legacy automaker surpassed EPS estimates on three occasions and missed on the other, with the average earnings surprise being 49.26%.
Ford Price and EPS Surprise
Ford Motor Company price-eps-surprise | Ford Motor Company Quote
Earnings Whispers for Q2
Our proven model does not conclusively predict an earnings beat for Ford this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Ford has an Earnings ESP of 0.00% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ford’s Key Metrics Ahead of Q2 Results
Ford’s second-quarter results are likely to get a boost from strong US sales. The company delivered 536,050 vehicles in the June quarter, up 0.8% from the year-ago period. Trucks comprised 57.6% of total sales volumes. Ford sold 308,920 trucks, including pickups and vans, marking its best second-quarter performance for trucks since 2019.
While internal combustion engine vehicles declined 0.8% year over year, electric and hybrid vehicles witnessed an uptick of 61.4% and 55.6%, respectively. In fact, Ford was the #2 EV brand in the country in the second quarter, just behind Tesla (TSLA - Free Report) and topping its crosstown rival General Motors (GM - Free Report) . Ford sold 23,957 EVs in the second quarter of 2024 in the United States. In terms of models, sales of Mustang Mach E, F-150 Lightning and E-Transit totaled 12,645, 7,902 and 3,410 units, up 46%, 77% and 96%, respectively. Notably, F-150 Lightning remains America’s top-selling electric truck and E-Transit is the nation’s best-selling electric van.
Here’s a rundown of the estimates for Ford’s revenues and EBIT for key segments for the three months ended Jun 30.
The Zacks Consensus Estimate for revenues from the Ford Blue unit (comprising ICE and hybrid models) is pegged at $24.1 billion, implying an increase of 11% sequentially but a decline from $25 billion reported in the corresponding period in 2023. The consensus mark for the segment’s EBIT is $2.34 billion, suggesting an uptick from $905 million and $2.31 billion recorded in the first quarter of 2024 and the second quarter of 2023, respectively.
The Zacks Consensus Estimate for revenues from Ford model e unit (comprising of electric vehicles) is pegged at $813 million, implying an increase from $115 million recorded in the first quarter of 2024 but a decline from $1.83 billion in the corresponding period in 2023. The consensus mark for the segment’s loss before interest and taxes is $1.28 billion, narrower than $1.32 billion in the last reported quarter but wider than $1.08 billion in the year-ago quarter.
The Zacks Consensus Estimate for revenues from the Ford Pro unit (encompassing commercial vehicles and services) is pegged at $16.8 billion, implying a decrease of 7.2% sequentially but an increase from $15.6 billion reported in the corresponding period in 2023. The consensus mark for the segment’s EBIT is $2.25 billion, suggesting a decline from $3 billion and $2.39 billion recorded in the first quarter of 2024 and the second quarter of 2023, respectively.
Price Performance & Valuation
Year to date, Ford has outperformed the industry, sector and S&P 500.
YTD Price Comparision
Image Source: Zacks Investment Research
From a valuation perspective, Ford is trading relatively cheap. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.34, way below its high of 0.77 over the last five years. It is also trading at a discount compared to the industry’s 1.53. The company has a Value Score of A.
Image Source: Zacks Investment Research
Evaluating Ford’s Potential
Ford’s growth prospects are driven by a strong vehicle mix, notably F-series trucks and SUVs, and a robust EV lineup, including Mustang Mach-E, E-Transit and F-150 Lightning. The Ford Blue segment shows significant potential with popular models like the F-150, Maverick, Bronco, and Mustang. Ford Pro’s bright future is supported by strong order books, rising demand and the successful Super Duty launch. In a strategic shift, Ford recently announced plans to expand Super Duty production at its Oakville plant, originally intended for EV crossovers, due to the high demand and profitability of its trucks.
Despite anticipated losses in the Ford Model e unit this year, its long-term outlook is promising. Ford’s EV segment is poised for robust growth through scaling, digital manufacturing efficiencies and vertical integration. We remain optimistic about the Ford+ plan, focusing on profit growth, e-mobility and customer satisfaction. High liquidity of around $43 billion (at the end of the first quarter of 2024) provides a solid foundation for investment in Ford+ priorities.
Last Word
No matter the outcome of Ford’s upcoming earnings report and the stock’s subsequent movement, it remains a solid long-term investment pick due to its strong fundamentals. Despite currently being only 6% off its 52-week high, the stock remains attractively valued. Investors should consider parking their cash in Ford at its current discounted levels for solid long-term returns.