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How Weak Guidance May Overshadow Ford's New Initiatives

Ford's New Initiatives Overshadowed By Weak Guidance?|Maintained At Equal Weight|Barclays

Although Barclays’ Brian A. Johnson expects OEM stocks to outperform suppliers in the near term, negative data points are likely to lead to volatility, with Ford Motor Company F 1.13% underperforming in the very near term, driven by a weaker outlook.

Johnson maintains an Equal-Weight rating on the company with a price target of $12.

Future Strategy

On its investor day, the analyst expects Ford to provide more information on its future strategy of Smart Mobility.

Related Link: Analyst: Tesla Autopilot's Switch From Camera To Radar Bad News For Mobileye

“Yet, while the strategy may provide us with greater comfort of Ford's role in a world of #disruptivemobility, we are concerned it will be overshadowed by a disappointing '17 outlook — which may rule the day for the stock,” Johnson mentioned.

The analyst also expects the company to offer more clarity on its technology portfolio in autonomous and electrification.

Guidance

The analyst expects the company to provide its 2017 guidance at the investor day next week, with management already having set the bar lower for 2017 at the Q2 earnings call.

“We see the biggest source of weakness from NA, with profits contracting by $1.2 billion, and with margin compression of 110bp down to 8.4 percent,” Johnson noted.

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DateFirmActionFromTo
Aug 2016Seaport GlobalInitiates Coverage onBuy
Aug 2016JefferiesInitiates Coverage onUnderperform
Jul 2016JP MorganMaintainsOverweight

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