What happened
Shares of Ford Motor Company (F 5.08%) were moving higher for a second day on Thursday, after a Wall Street analyst placed the stock on his firm's short-term buy list.
As of 11 a.m. EST, Ford's shares were up about 11.5% from Wednesday's closing price.
So what
In a note released on Wednesday morning, Deutsche Bank analyst Emmanuel Rosner added Ford to the bank's short-term Catalyst Call Buy List, a group of stocks that could move higher following a "catalyst" event. Rosner maintained a long-term hold rating on the shares, but raised his price target to $11 from $9.
Rosner thinks that Ford's earnings report next month, and specifically its 2021 guidance, could prove to be a catalyst. He sees "strong" volume growth for U.S. auto sales in 2021, as the country recovers from the pandemic, and he believes that Ford's "robust" new-product cycle has put it in position to outperform.
Ford's all-new 2021 F-150 began shipping at the end of November. It's just one of several new products that could help Ford's U.S. sales outperform in 2021. Image source: Ford Motor Company.
That, plus lower warranty and recall costs, and savings from an ongoing restructuring program, could lead Ford to issue stronger-than-expected guidance for 2021, which in turn could "prompt investors to anticipate a more aggressive turnaround trajectory," the analyst said.
That's why auto investors bid Ford's stock up 8.4% on Wednesday, and why it was up again on Thursday morning.
Now what
Here's my take, as someone who has followed Ford closely for over a decade: I think there's a very good chance that this happens.
Ford investors know that the F-150 pickup is the product most important to the company's bottom line, and it has a brand-new version that's getting great reviews. Add in the new Bronco Sport, the larger Bronco coming later this year, and the buzz around the new electric Mustang Mach-E, and it's easy to see how Ford could have a great year in a booming market.
We'll find out if Rosner and I are right about Ford's guidance when the company reports its fourth-quarter and full-year 2020 earnings after the market closes on Feb. 4.
