Barclays downgrades Ford Motor as earnings outlook deteriorates

Barclays is moving to the sidelines when it comes to Ford Motor . The bank downgraded the automaker to equal weight from overweight. Analyst Dan Levy accompanied the move by lowering his price target to $11 from $13, implying upside of just 5.5%. “Considering Ford’s current earnings profile and valuation, it lacks a compelling case for us to remain OW-rated. Simply, with Ford facing headwinds from volume and price in ’25, it’s unclear that cost actions will be sufficient to offset these drags — this uncertainty leads us to step to the sidelines with an EW rating,” the analyst wrote. F 1Y mountain F 1Y chart Levy pointed to Ford’s elevated inventory levels, which will take time to resolve, as one lingering headwind. “Regardless of how much Ford can justify its elevated inventory, the current situation means that Ford will have sharp volume headwinds in ’25 — especially when considering that 2025 will see the non-repeat of inventory replenishment which benefited 2024,” he wrote. “Ford’s inventory issue, in our view, will cast an overhang on earnings until its clearly resolved, as elevated inventory will keep the risk of an adverse turn in pricing elevated.” These volume and price headwinds could limit any potential upside ahead for shares of Ford, Levy added, especially since the stock’s valuation is not currently especially compelling. “Barring a positive surprise on ’25 cost-outs, we see little reason for investors to get excited on the case for Ford fundamentals,” he remarked. Investors will get a look at Ford’s fourth-quarter figures on Feb. 5. Shares of Ford have lagged over the past year, slipping slipped nearly 7%, while the S & P 500 is up more than 20% in that time. The stock lost more than 1% in the premarket on the back of the downgrade. Analyst sentiment on the stock is mixed. LSEG data shows that 15 of 26 analysts covering Ford have a hold rating, while another five rate it as a sell or underperform. Another six have a buy or strong buy rating.