Ford (F): Buy, Sell, or Hold Post Q4 Earnings?

Ford Motor Company (F) recently released its Q4 2024 earnings report, providing investors with valuable insights into the company's financial performance. As the automotive industry continues to evolve, with a growing emphasis on electric vehicles (EVs) and sustainability, it is essential to analyze Ford's prospects and determine whether to buy, sell, or hold its stock. This article will delve into Ford's recent earnings, market trends, and competitive landscape to provide a well-informed investment decision.



Ford's Q4 2024 earnings report showed mixed results, with some positive developments and challenges to consider. The company reported adjusted earnings per share (EPS) of 39 cents, surpassing the Zacks Consensus Estimate of 34 cents and rising from 29 cents in the year-ago quarter. However, the company's consolidated fourth-quarter revenues came in at $48.2 billion, up 5% year over year, but slightly below the Zacks Consensus Estimate of $48.5 billion. Total automotive revenues were around $44.9 billion, topping the Zacks Consensus Estimate of $43.5 billion and higher than $43.3 billion generated in the year-ago quarter.



Ford's segmental performance revealed both strengths and weaknesses. The Ford Blue segment, which includes internal combustion engine vehicles, saw a 2% increase in total wholesale volume to 774,000 units and a 4% increase in revenues to $27.3 billion. Earnings before interest and taxes (EBIT) for the Ford Blue segment came in at $1.58 billion, above expectations. However, the electric vehicle business, Ford Model E, lost $5 billion in 2024 and $1.94 billion during the fourth quarter, indicating challenges in the EV segment.



Ford's 2025 outlook provides further insights into the company's prospects. Ford expects EBIT of $7.5 billion to $8 billion from Ford Pro, $3.5 billion to $4 billion from Ford Blue, and a loss of $5 billion to $5.5 billion from Ford Model E. Ford Credit is forecasted to earn $2 billion. However, Ford's stock dropped over 4% in after-hours trading following the release of its fourth-quarter earnings, reflecting investor worries about the company's future profits and ability to handle tough market conditions.



Considering the competitive landscape in the automotive industry, Ford's performance compares to its peers with mixed results. General Motors (GM) easily surpassed Wall Street's fourth-quarter expectations in 2024 and said its 2025 forecast aligns with or exceeds analysts' predictions. This indicates that GM is performing better than Ford in terms of meeting market expectations and growth prospects.

Several factors could influence Ford's market position in the coming years. One significant factor is the company's commitment to electrification and sustainability. Ford has set a goal to achieve carbon neutrality no later than 2050 across its vehicles, operations, and supply chain. This commitment, along with investments in electric vehicles (EVs) and battery technology, could help Ford maintain a competitive edge in the market as consumer demand for sustainable transportation options continues to grow.

Another factor is Ford's focus on improving vehicle quality and costs. In 2024, Ford underperformed analysts' expectations due to unexpected warranty and recall issues. To rectify these issues, CEO Jim Farley has assured investors that the company will make improvements in vehicle quality and costs in 2025. If Ford successfully addresses these concerns, it could enhance the company's reputation and market position.

Lastly, Ford's strategic initiatives, such as the Ford+ growth plan, could also influence its market position. This plan involves redefining customer value, reducing cyclicality, improving capital efficiency, and generating profitable growth and strong free cash flow. By effectively executing this plan, Ford could enhance its competitive position in the automotive industry.

In conclusion, while Ford's performance in 2024 lagged behind some of its competitors, the company's commitment to electrification, focus on improving vehicle quality and costs, and strategic initiatives could help it maintain a competitive market position in the coming years. Investors should closely monitor Ford's progress in the electric vehicle segment and its ability to navigate market challenges. Based on the provided information, a "hold" or "buy" recommendation may be appropriate, depending on individual investment goals and risk tolerance. However, it is essential to consult with a financial advisor before making any investment decisions.