Ford Stock is on the rise. How Long Can It Go On?

Ford Stock

Ford stock is on a roll, and Argus analyst Bill Selesky thinks it may continue to rise from recent highs.

Selesky raised his Ford Motor (ticker: F) stock price estimate to $29 per share from $20 on Thursday. The stock finished at $24.45 up 3.3 percent, while the S&P 500 slipped 0.1% and the Dow Jones Industrial Average declined 0.5 percent.

Selesky raised the shares to Buy in February, and things are looking much better now.

“We remain pleased by the company’s improving balance sheet and well-defined financial ambitions.” “We expect that supply-chain issues and semiconductor chip shortages will be resolved shortly, providing additional prospects for stronger sales and profit performance,” Selesky said. “On a more positive note, on January 4, 2022, Ford stated that owing to increased consumer demand, it will almost quadruple the yearly output of its electric F-150 Lightning pickup truck to 150,000 units, up from 80,000 originally.”

According to Bloomberg, his $29 price objective is the new high on Wall Street. The previous high was set by Tudor Pickering analyst Jeoffrey Lambujon, who has a target price of $26.

Ford is in the odd situation of being favored by Wall Street analysts but having an average price objective that is lower than the stock’s current trading price. Although over 54% of analysts covering Ford stock rate it as a Buy, the average target price is just above $20 per share, representing a decline of almost 18% from current levels.

The average Buy-rating ratio for S&P 500 equities is at 55%, while the average analyst price target predicts a 10% gain.

Price targets set by analysts may be interpreted in a variety of ways. In general, a price target is an amount an analyst believes any investor can spend for a company while still receiving a typical return in the future. Over the long term, the S&P 500 has returned around 10% every year on average, including dividends.

When the price of a stock increases swiftly, the ‘buy-a-stock-that-will-drop’ scenario might occur. This time, it seems to be the case. Ford’s stock has risen by around 73% in the last three months. Such moves provide analysts the choice of downgrading a company or raising target prices. Selesky, for one, increased his price goal.

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Mambwe Abebe