Ford beats Tesla to become auto industry’s top growth stock in 2021

Ford beats Tesla to become auto industry's top growth stock in 2021

The all-electric Ford F-150 Lightning truck throughout an augmented actuality presentation on the Motor Bella Auto Present in Pontiac, Michigan, on Tuesday, Sept. 21, 2021.

Emily Elconin | Bloomberg | Getty Photos

DETROIT – Shares of Ford Motor soared by roughly 140% final yr, beating Tesla, its bigger crosstown rival Basic Motors and a number of electrical car start-ups to change into the most effective performing inventory amongst automakers in 2021.

Traders have rewarded the brand new path below auto veteran Jim Farley, who took the helm in October 2020 after the Ford board ousted trade outsider Jim Hackett.

Farley promised to be extra open and direct with buyers. He additionally launched the Ford+ restructuring plan, which shifts extra sources to construct electrical automobiles just like the upcoming F-150 Lightning pickup.

“We’re executing our plan and we’ll proceed to try this so each enterprise in our portfolio has a sustainable future. If not, we’ll restructure it,” he stated in a January 2021 interview.

Morgan Stanley analyst Adam Jonas stated it was “actually a breakthrough yr for Ford … simply an important yr strategically for the corporate because the monetary disaster.”

Ford’s largest single-day share improve got here on Dec. 10 when Farley confirmed on Twitter that it might triple manufacturing of the electrical Mustang Mach-E to greater than 200,000 models per yr for North America and Europe by 2023. He informed CNBC the day earlier than that the corporate halted reservations of the F-150 Lightning after they hit 200,000 models.

Shares that day jumped 9.6% to a roughly 20-year excessive of $21.45 a share.

The following finest day for buyers got here on Oct. 28 after the automaker delivered its third-quarter earnings, elevating its yearly steering and asserting EPS that doubled analysts’ estimates. Shares rose by 8.7%.

Different massive days included a 8.5% leap on Might 26 throughout the automaker’s investor day, with particulars of the Ford+ turnaround plan, and a 8.4% acquire on Jan. 20 after Deutsche Financial institution added a short-term purchase on the inventory forward of its annual earnings report.

Since Farley took the helm greater than 15 months in the past, the inventory is up by greater than 200%. The runup will proceed if the corporate is ready to ship on Ford+ plan initiatives that included accelerating EV plans, observers say, and obtain an 8% adjusted revenue margin earlier than curiosity and taxes by 2023.

Ford is rated obese with a worth goal of $20.25 a share and a long-term progress fee of 67.8%, in response to a median of twenty-two analysts compiled by FactSet. Shares closed final yr at $20.77, up by 136.3% in 2021.  

Ford, at a market cap of $83 billion, nonetheless has an extended street forward of it to get its market worth as much as most of its established rivals in addition to EV start-up Rivian.

Here is how different legacy automakers, in addition to high rising EV start-ups, did final yr and what analysts anticipate from them in 2022, in response to common analysts compiled by FactSet.

Tesla (TSLA): $1,056.78, up 49.8%

  • Ranking/goal: Maintain/$878
  • Market cap: $1.1 trillion

Lucid (LCID, since July 26): $38.05, up 41.8%

  • Ranking/goal: Obese/$44.33
  • Market cap: $62.6 billion

Volkswagen (VWAGY): $29.39, up 41.2%

  • Ranking/goal: Obese/$28.77
  • Market cap: $127.9 billion

Basic Motors (GM): $58.63, up 40.8%

  • Ranking/goal: Purchase/$74.45
  • Market cap: $85.1 billion

Toyota (TM): $185.30, up 19.9%

  • Ranking/goal: Obese/$211.59
  • Market cap: $253.2 billion

Ferrari (RACE): $258.82, up 12.8%

  • Ranking/goal: Maintain/$258.40
  • Market cap: $47.6 billion

Stellantis (STLA): $18.76, up 10%

  • Ranking/goal: Purchase/$26.51
  • Market cap: $59.2 billion

Fisker (FSR): $15.73, up 7.4%

  • Ranking/goal: Obese/$25.50
  • Market cap: $4.7 billion

Rivian (RIVN, since Nov. 10): $103.69, up 2.9%

  • Ranking/goal: Obese/$133.92
  • Market cap: $93.4 billion

Nio (NIO): $31.68, down 35%

  • Ranking/goal: Purchase/$59.18
  • Market cap: $52.1 billion

Nikola (NKLA): $9.87, down 35.3%

  • Ranking/goal: Maintain/$15.29
  • Market cap: $4 billion

Lordstown Motors (RIDE): $3.45, down 82.8%

  • Ranking/goal: Underweight/$4.60
  • Market cap: $663.2 million

– CNBC’s Michael Bloom contributed to this report.

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