Ford (F) shares have doubled in value over the past year and are up 56.4% from early 2021 to close on Monday.
Last month, the No. 2 auto company in the US posted strong quarterly revenue growth of 38% and raised its annual earnings forecast.
Last week, the White House hosted an event that sparked other enthusiasm among some investors in “electric vehicle stock.” In the presence of executives from Ford, General Motors (GM), and Stellantis, US President Joe Biden solemnly signed an executive order that 40% -50% of all new cars sold in the US in 2030 be electric.
Ford CEO Jim Farley reaffirmed the company’s commitment to “spearheading the electrification revolution among American automakers,” saying he sees “good opportunities for electric vehicles to account for 40-50% of Ford’s US sales by 2030.”
He also noted that consumer demand for the new Ford F-150 Lightning, Mustang Mach-E, and E-Transit electric vehicles had exceeded expectations.
However, Wall Street analysts point out that despite the strength of Ford’s business fundamentals and the company’s long-term outlook, today is not the best time to buy stock.
Why not buy Ford stock now?
Market experts note that the global shortage of chips for the US automotive industry will restrain the growth of Ford and its rival General Motors.
This limiting factor was why shares of Ford, General Motors, and Tesla (TSLA) rose very moderately and for a short period, despite the powerful financial results of all these companies in the second quarter and the first half of the year.
So, if you look at the movement of Ford shares chart over the past months, – positive news – a rise was followed by a decline in claims.
May 26 – Ford announced an increase in electrification investment, aiming for 40% of electric vehicle sales by 2030. A week later, a jump in the growth of shares – followed by a decline.
June 17 – Ford shares fell despite improvements in the company’s outlook.
July 28 – a decline followed strong growth of shares on the background of a successful quarterly report.
Today, the maximum target price for Ford shares among investment company analysts is $ 17 for the next 12 months. Some analysts expect Ford shares to rise again to $ 16.55 soon but are unlikely to rise above that mark.
Analysts recommend waiting for a lower price to buy Ford shares than the current $ 13.75 level at Monday’s close. However, the current price may be pretty high when stock market investors are worried about the global shortage of microcircuits and the risks of the Delta strain on the economy and consumer demand.
