Ford Motor (F) stock is trading in positive territory Tuesday after Goldman Sachs upgraded the embattled automaker to Buy from Hold.
Goldman's upgrade of Ford is centered around the possibility of improving profitability, according to Barron's, particularly within its commercial business.
"We believe there is a margin opportunity driven by the company's more profitable commercial business," says Goldman Sachs analyst Mark Delaney. Ford's commercial business, Ford Pro, is its most profitable unit.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The analyst also provided positive commentary on Ford's growing software and services mix.
"The company is targeting $1 billion of software revenue in 2025, and for software and physical services to be 20% of Pro [operating profit] in 2026," Delaney said. "In addition, we believe cost actions – in internal combustion engines (ICE) and electric vehicles (EVs) – can help to offset industry headwinds."
Is Ford stock a buy, sell or hold?
Ford Motor shares down more than 26% since mid-July and Wall Street is on the sidelines when it comes to the consumer discretionary stock.
According to S&P Global Market Intelligence, the average analyst target price for F stock is $13.02, representing implied upside of over 20% to current levels. Meanwhile, the consensus recommendation is a Hold.
But like Goldman Sachs' Delaney, there are bulls to be found. Financial services firm BofA Securities, for instance, also has a Buy rating on the large-cap stock, along with a $20 price target.
"On August 21, Ford announced several changes to its product plans that should help improve the profitability and capital efficiency of its Core to Future transition," says BofA Securities analyst John Murphy. "Among the changes, Ford now plans to launch a new electric commercial van in 2026 and two new electric pickup trucks in 2027."
Murphy adds that Ford's initiatives include shelving plans "to build an electric three-row SUV, but instead will leverage its hybrid technology in the next three-row SUVs." He believes "these changes will position Ford to benefit from growing demand for EVs, while also focusing on areas in which it has a Core competitive advantage."
BofA's $20 price target is the highest on Wall Street and sits nearly 90% above where Ford is currently trading.
Related Content
-
Why Boeing Is Considering a Potential $10 Billion Stock SaleBoeing is reportedly considering issuing stock to shore up its cash reserves. Here's what you need to know.
-
Is CVS Health About to Break Up? Here's What We KnowCVS Health stock is lower Tuesday on reports the healthcare company is conducting a strategic review of its operations, which includes a potential breakup.
-
Why Boeing Is Considering a Potential $10 Billion Stock Sale
Boeing is reportedly considering issuing stock to shore up its cash reserves. Here's what you need to know.
-
Is CVS Health About to Break Up? Here's What We Know
CVS Health stock is lower Tuesday on reports the healthcare company is conducting a strategic review of its operations, which includes a potential breakup.
-
Which Type of Power of Attorney Is Right for You?Durable or limited? How about springing or military? There are many more kinds of POAs than just medical or financial.
-
How Employers Can Ensure They're Paying All Employees Fairly'Equal pay for equal work' has been the law since 1963, but pay gaps because of gender, race and other characteristics persist. How does a company get it right?
-
Stock Market Today: Stocks Gain After Powell Talks Rate CutsA late-day burst of buying power helped the main indexes close higher for the day, month and quarter.
-
Do You Know How Much You've Saved in Your 401(k)?And are you sure you're enrolled in one? A surprising number of workers don't know where they stand with their company's retirement plan. Time to find out.
-
Riches vs Wealth: A Cautionary Tale From 'The Hobbit'The story of dwarven king Thorin Oakenshield in J.R.R. Tolkien's classic novel perfectly illustrates how the relentless pursuit of wealth can undermine the fulfilling experience of true riches.
-
How Will the Election Impact the Stock Market?Election years tend to be positive for the stock market, but investors should brace for volatility in the lead-up to and aftermath of November 5.
