Please ensure Javascript is enabled for purposes of website accessibility

Why Ford Stock Is Up Today

By John Rosevear – Jun 3, 2020 at 3:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

May's sales weren't as bad as expected.

What happened

Shares of Ford Motor Company (F 2.86%) were trading higher on Wednesday afternoon on signs of an accelerating recovery after U.S. auto sales totals for May turned out to be better than analysts had expected. 

As of 3:15 p.m. EDT, Ford's shares were up about 5.2% from Tuesday's closing price.

So what

While Ford no longer reports monthly sales results for the U.S., overall sales of "light vehicles" (cars, pickups, and SUVs) appear to have fallen about 30% in May from a year ago. That was less of a drop than analysts had predicted -- and an improvement over April, when U.S. auto sales were down by half.

A blue Ford F-150 pickup towing a trailer

Will strong pickup sales pull Ford out of this crisis? It's too early to say, but signs are good so far. Image source: Ford Motor Company.

The seasonally adjusted annualized rate (SAAR) of light-vehicle sales in the U.S., a widely watched figure, was 12.17 million in May, according to Automotive News. Analysts had predicted a result in the mid to high 11 million range. The SAAR fell to 11.33 million in March, when most auto dealers closed mid-month amid the COVID-19 pandemic, and to just 8.6 million in April. 

Edmunds estimated that Ford's U.S. sales probably fell about 32% in May from May of 2019, but they were likely up by a similar percentage from April. 

Now what

After reopening most of its factories in the U.S. and Canada in mid-May, Ford is continuing to ramp up production to restock its dealers as consumers return to showrooms. Ford is believed to be prioritizing pickup-truck production, as sales have proven surprisingly resilient since the onset of the pandemic, and supplies are thought to be tight. 

As auto investors know, pickups are a key driver of profit for Ford; if production remains on track and demand remains brisk, Ford's second-quarter results might not be quite as bad as the company predicted back in April. 

John Rosevear owns shares of Ford. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ford Motor Company Stock Quote
Ford Motor Company
$11.52 (2.86%) $0.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.