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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 Photographs

DETROIT – Shares of Ford Motor soared by roughly 140% final yr, beating Tesla, its bigger crosstown rival General Motors and a number of electrical automobile start-ups to turn out to be the very best performing inventory amongst automakers in 2021.

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

Farley promised to be more open and direct with traders. He additionally launched the Ford+ restructuring plan, which shifts extra assets 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 are going to restructure it,” he stated in a January 2021 interview.

Morgan Stanley analyst Adam Jonas stated it was “actually a breakthrough yr for Ford … simply a very powerful yr strategically for the corporate for the reason that monetary disaster.”

Ford’s largest single-day share enhance got here on Dec. 10 when Farley confirmed on Twitter that it will triple manufacturing of the electrical Mustang Mach-E to greater than 200,000 models per yr for North America and Europe by 2023. He advised CNBC the day earlier than that the company 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 subsequent finest day for traders got here on Oct. 28 after the automaker delivered its third-quarter earnings, raising its yearly guidance and saying EPS that doubled analysts’ estimates. Shares rose by 8.7%.

Different massive days included a 8.5% bounce on Might 26 in the course of 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 achieve an 8% adjusted profit margin earlier than curiosity and taxes by 2023.

Ford is rated chubby with a worth goal of $20.25 a share and a long-term development charge of 67.8%, in keeping with 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 count on from them in 2022, in keeping with 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

Common 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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