Ford Stock Rises Amid Wall Street Target Hike, China Rollout Of Rival To Tesla Model Y

 Ford Stock Rises Amid Wall Street Target Hike, China Rollout Of Rival To Tesla Model Y

Ford‘s (F) well poised for the future as it works its way out of the chip crisis and accelerates on electric vehicles, a Wall Street firm said. Ford stock rose toward a buy point.




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Credit Suisse analyst Dan Levy sees a favorable cycle into 2023, as Ford rebuilds low vehicle inventory. He also expect the auto giant to become a bigger force in a growing EV market, currently dominated by Tesla (TSLA).

Levy hiked his outlook on Ford stock to outperform from neutral, and his price target per share by $5 to $20.


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“We’ve seen two lines of thought emerge on auto stocks. The more tempered view is that with the ongoing semi (chip) shortage limiting upside on 2022, there is little need to be in auto stocks now,” Levy wrote in a note to clients. Industrywide, low chip supplies have negatively impacted vehicle production and inventories this year, gutting sales.

Levy added, “However, we take a more constructive view on auto stocks — with the worst likely passed on the semi shortage, and with historically low inventory implying inventory rebuild will likely last well into 2023, we see a positive trajectory ahead for auto stocks.”

GM, Ford Earnings On Tap

On Oct. 27, Ford and General Motors (GM) report earnings for the third quarter. Levy sees both auto giants beating Q3 earnings views and raising near-term profit guidance, as they manage their way out of the chip supply crisis.

Ford continues its EV push. On Oct. 18, Ford announced its made-in-China Mustang Mach-E, locally made in the city of Chongqing for local consumers, is rolling off the assembly line, with orders open.

Ford considers the Mustang Mach-E a critical vehicle in its bid to unseat Tesla, which dominates the luxury EV market in China. The electric crossover is positioned against the Model Y, which Tesla makes in Shanghai.

At the same time, Ford and GM are fending off China’s BYD (BYDDF), Nio (NIO), Xpeng (XPEV) and Li Auto (LI). All those Chinese EV companies are making huge sales strides on home turf.


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Ford Stock, EV Stocks

Shares of Ford rose 4% to 16.04 on the stock market today. Ahead of earnings next Wednesday, Ford stock sits about a half point below a 16.55 entry from a cup base, which stretches back to early June, according to MarketSmith chart analysis.

GM stock climbed 1.7% to 57.67, rallying back near a 58.70 buy point from a double-bottom base ahead of earnings. Both auto giants formed much of their bases below the 10-week lines, though they are now back above it.

Among other EV stocks, Tesla closed 0.2% higher. The EV giant edged lower in late trading despite beating Q3 EPS and sales views. BYD edged up 0.5%, still in buy range. Nio slipped 0.6%. Xpeng dipped 0.5% and Li Auto climbed 0.3%, both offering early entries.

Separately on Wednesday, unconfirmed reports said Volkswagen (VWAGY) and Huawei plan to set up a joint venture tied to self-driving car technology. Huawei responded saying it does not confirm the joint venture speculation.

Huawei does, however, have a licensing deal with a Volkswagen supplier. It expects to provide millions of VW vehicles with 4G wireless connectivity. The U.S. recently blacklisted the Chinese wireless tech firm on grounds of national security risk.

Meanwhile, Volkswagen and Ford are partnering on electric vehicles. Both invested billions in an ambitious shift to develop EV technology and phase out gas and diesel cars.

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