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Barron’s issued a positive commentary on Ford Motor (NYSE:F) in its latest edition, noting that despite a sharp underperformance this year, the Dearborn, Michigan-based automaker is ready to close the gap with its Detroit rival General Motors (NYSE:GM).
Ford (F) has gained only ~7% YTD, while GM (GM) has rallied over 29% compared to the ~17% rise in the S&P 500 (SPY).
“Underperformance by one of America’s two largest automakers relative to the other doesn’t happen very often,” Barron’s wrote, adding that the duo is not highly dissimilar in financials, but investors have yet to recognize that.
However, for one underperformer to close the gap, “there just needs to be a catalyst,” the publication said, arguing that capital discipline would be the key to that transformation.
Anticipated special dividends worth up to $2.60 a share, less spending on EVs, an increased focus on quality, and, therefore, a reduction of warranty expenses would also help the narrative.
A thriving auto market in the U.S. will also be a tailwind, with Americans expected to buy 16M new cars in 2024, up from roughly 15.5M in 2024.
“Add it all up, and trimming the capital budget might be the best sign Ford is getting serious about its stock price. Investors should, too,” Barron’s argued.
However, according to Seeking Alpha’s Quant System, Wall Street analysts, and Seeking Alpha analysts, Ford (F) remains at a hold.
SA analyst Manuel Paul Dipold issued a sell rating on Ford (F) this week, arguing that its most important market, the U.S., is “stagnating” and that its valuation is cheap only in terms of non-GAAP measures.