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FORD Fundamental Analysis October 2023

Ford Fundamental Analysis.

Ford Fundamental Analysis. The company, headquartered in Dearborn, MI, is a prominent global automaker with a wide range of vehicles, including cars, trucks, SUVs, electrified models, and luxury vehicles under the Lincoln brand. It has 5 operating segments: Blue, Model E, Pro, Next and Credit.

Business Organization.

Ford Blue concentrates on retail sales, covering Ford and Lincoln vehicles, including internal combustion engine (ICE) and hybrid models. This segment goes beyond vehicle sales, offering service parts, accessories, and digital services while emphasizing innovation in ICE and hybrid vehicle development.

Ford Model E‘s core focus is on electric vehicle (EV) retail sales, along with service parts, accessories, and digital services. The segment places a strong emphasis on advancing EV technology and digital vehicle solutions, including software development. Ford Pro specializes in commercial vehicles and services, catering to commercial, government, and rental customers. It encompasses the sale of essential Ford Pro vehicles, including Super Duty and Transit vans in North America and Europe.

Together, Ford Blue, Model e, and Pro make up the Automotive segment. The Ford Next segment focuses on costs and investments related to emerging business initiatives. Lastly, the Ford Credit segment handles vehicle-related financing and leasing activities.





Diverse Vehicle Portfolio:

Ford boasts a strong lineup of vehicles. F-series trucks, Maverick pickup, and an array of SUVs, including Escape, Explorer, Expedition, EcoSport, and Edge. The introduction of electric vehicles (EVs) such as the Mustang Mach-E, E-Transit, and F-150 Lightning has significantly contributed to the company’s overall deliveries. Within the Ford Blue segment, Ford enjoys substantial growth potential. We anticipate a roughly 4% year-over-year increase in wholesale shipments from the Ford Blue unit in 2023. The segment profits expected to grow by 17%.

Embracing Electrification:

Ford’s Ford+ plan, designed to boost profitability, explore the electric mobility future, and enhance the customer experience, reflects the company’s commitment to electrification. The Mustang Mach-E stands out as the second best-selling electric SUV in the United States, driving Ford’s EV sales. Expanding deliveries of E-Transit vans and F-150 e-pickups further bolster shipment prospects. The company remains on track to achieve an annualized EV production capacity of 600,000 units worldwide by the end of the year. With a bold EV strategy involving an investment of around $50 billion by 2026 and a target production of over 2 million EVs by 2026-end, Ford positions itself for long-term growth. By 2030, Ford aims for EVs to constitute 50% of its global sales, solidifying its position in the thriving EV market.

Promising Prospects for Ford Pro:

Ford Pro is on the verge of an exciting future, driven by strong order books, surging demand signals, and the successful launch of the all-new Super Duty. These factors position the segment for remarkable growth and reinforce its market leadership. We anticipate a substantial 148% year-over-year increase in adjusted EBIT from the segment in 2023. Wholesale shipments from the Ford Pro unit are also projected to climb approximately 13% year over year in 2023.

Solid Liquidity & Investor-Centric Initiatives:

Ford wrapped up the second quarter of 2023 with over $30 billion in cash and $47 billion in liquidity, establishing a robust financial foundation for its Ford+ initiatives. Ford aims to distribute 40-50% of free cash flow (FCF) going forward, underscoring its dedication to delivering value to shareholders

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