RBC Capital Raises Ford Motor PT to $11, Boosting Dividend Appeal

RBC Capital raised its PT on Ford Motor Company (F) to $11 from $10, citing Q2 earnings beat and fiscal year 25 guidance as "impressive". The firm believes Ford could be the story of '26 if management reduces EV losses and Pro continues to exceed expectations. RBC also believes Ford could be best positioned if USMCA is negotiated at better tariff rates.

RBC Capital has upgraded its price target (PT) on Ford Motor Company (F) to $11 from $10, citing the company's Q2 earnings beat and fiscal year 2025 guidance as "impressive." The firm believes Ford could be the story of 2026 if management reduces EV losses and the Pro division continues to exceed expectations. RBC also believes Ford could be best positioned if the USMCA (United States-Mexico-Canada Agreement) is negotiated at better tariff rates [1].

Ford Motor Company reported a strong Q2, beating Wall Street estimates on both the top and bottom lines. Automotive revenue checked in at $46.94 billion, topping the $43.21 billion consensus estimate, and adjusted earnings per share were $0.37 compared to the $0.33 expected. Despite the positive earnings, investors were left with the reality of tariffs and EV policy uncertainty. Ford's profit for 2025 is likely to post a sharp drop due to tariff costs, which are now estimated at $2 billion, $500 million more than originally anticipated. The company incurred $800 million in tariff costs during the second quarter alone [2].

Ford's Pro division generated $2.3 billion EBIT during the second quarter with a 12.3% margin on $18.8 billion in revenue, outperforming the traditional vehicle selling business. The division's higher-margin business is driven by software and physical services, which contributed about 17% of Ford Pro's EBIT. Ford Pro paid subscriptions jumped 24% compared to the prior year to 757,000 [2].

RBC Capital's upgrade comes as Ford announced a new electric pickup truck to be launched in 2027 with a starting price of $30,000. The global electric vehicle market is seeing increasing competition, particularly from Chinese manufacturers. Barriers for Chinese EVs include regulatory hurdles and market entry costs [3]. Ford's new EV could position the company as a leader in the competitive EV market.

Ford's CEO Jim Farley has promised a "Model T moment" on August 11, highlighting the company's hopes for next-generation, low-cost models. However, the company will need to address its volume and costs of recalls to improve investor sentiment. Ford had 94 recalls so far this year compared to Stellantis' 21 [2].

References:
[1] https://www.ainvest.com/news/stock-analysis-transdigm-group-outlook-navigating-mixed-technical-analyst-landscape-2508/
[2] https://www.fool.com/investing/2025/08/08/the-silver-lining-in-fords-messy-q2-earnings/
[3] https://san.com/cc/global-ev-competition-charging-up-as-ford-drops-new-low-priced-entry/