Please ensure Javascript is enabled for purposes of website accessibility

Why Ford Stock Is Up Today

By John Rosevear – Jun 19, 2020 at 10:01AM

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

Ford is getting back to full speed ahead of schedule as sales quickly rebound.

What happened

Shares of Ford Motor Company (F -2.35%) opened higher on Friday, after Ford said that it will accelerate its return to full production and after a prominent Wall Street analyst raised his price target for the company's shares.

As of 10 a.m. EDT, Ford's shares were up about 3.5% from Thursday's closing price.

So what

Ford confirmed on Friday morning that it expects to return to its full pre-coronavirus production schedule in the U.S. on Monday, two weeks earlier than planned, as it scrambles to resupply dealers running low on Ford's strong-selling pickup trucks and SUVs.

A darkened photo of the front end of a pickup truck.

Ford released this "teaser" image of the all-new 2021 F-150 pickup, set to debut next week. Image source: Ford Motor Company.

Ford chief operating officer Jim Farley said earlier this month that the company was aiming to be back at full production by July 6. The company's U.S. factories have been running at slower speeds than usual since reopening in May after an extended shutdown amid the COVID-19 pandemic. 

A Ford spokesperson said that the company's workforce and suppliers were able to get back up to speed more quickly than it had expected. 

Separately, in a note on Friday morning, J.P. Morgan analyst Ryan Brinkman raised his price target for Ford's shares to $7 from $6, while maintaining a neutral rating on the stock. Brinkman said that U.S. new-vehicle sales and used-vehicle pricing have been recovering in May and June nearly as fast as they plunged in March and April. 

Both trends are bullish for Ford: Strong new-vehicle sales are good for obvious reasons; strong used-vehicle pricing helps Ford's financial-services subsidiary recover more money on off-lease vehicles and supports more aggressive new-vehicle lease pricing. 

Now what

Next week will kick off a busy season for the Blue Oval. The company will reveal an all-new version of its most important product, the F-150 pickup, in an online event Thursday evening. The much-anticipated Bronco SUV will debut soon after, on July 9. 

Those new products, and others to follow later in the year, will require retooling work at several of Ford's factories; part of the reason for Ford's accelerated return to normal is to ensure that inventories of current products can be replenished before that work starts.

For auto investors eyeing Ford's beaten-up shares, the new F-150 will be big news. Stay tuned. 

 

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
F
$11.20 (-2.35%) $0.27

*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
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/01/2022.

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.