What happened
Shares of Ford Motor Company (F 1.26%) were trading higher today after a prominent Wall Street analyst released a bullish note and raised his bank's rating on Ford's stock. As of 11 a.m. EDT on Friday, Ford's shares were up about 3.2% from Thursday's closing price.
So what
In a new note on Friday morning, Barclays analyst Brian Johnson upgraded Ford to overweight from equal weight, and raised his price target for the shares to $16 from $9.
Johnson wrote that while he had been somewhat skeptical of Ford's prospects, in part because of the company's seeming lack of an aggressive electric-vehicle (EV) strategy, some recent research has changed his view.
For starters, a deep dive into Ford Europe's business plans and a closer look at Ford's alliance with Volkswagen (VWAGY 1.35%) made Johnson more confident in CEO Jim Farley's plan to improve Ford's profit margin over the next couple of years.
More broadly, Johnson now thinks that Ford will shift aggressively (more aggressively than auto investors currently believe) to EVs in the second half of the decade. The analyst believes that Ford will likely share much more detail around its electrification strategy, and its plan to center future products around two dedicated platforms, at its annual investor day in the spring.
Ford's electric Mustang Mach-E has impressed critics. Sales have been brisk, which bodes well for the Blue Oval's next battery-powered products. Image source: Ford Motor Company.
Now what
Having watched Ford closely for a decade now, I think Johnson's take on Ford's EV strategy is spot-on. The company has always said that it will be somewhat conservative with its transition to electric drivetrains, because of a sense that it will have to "lead" its customers to EVs by offering strong products that play up the advantages of electric drivetrains.
That effort has already begun with the hot-selling Mustang Mach-E. I expect it will pick up momentum with the release of the battery-electric E-Transit commercial van later this year and the electric F-150 pickup in mid-2022, though it may be a bit longer before we see Ford go all-in on EVs as rivals like General Motors (GM 0.78%) and Volkswagen have done.
