Shares of Ford Motor Co. experienced a significant slump on Monday after Jefferies analyst Philippe Houchois downgraded the automaker. This downgrade comes just two months after Houchois had turned bullish on the company.
Houchois stated that while the recent change in electric-vehicle guidance provided by Ford in its quarterly results was considered “sensible,” the fact that it came so soon after an upbeat update on its EV business at an analyst gathering on May 22nd was seen as a setback. As a result, Houchois reluctantly backed away from his previous bullish call on the company.
In his note to clients, Houchois expressed appreciation for Ford’s efforts in disclosure and accountability, highlighting that there appears to be no apparent change to the company’s midterm strategy. However, the new EV strategy, which focuses on software and a more concentrated lineup, leaves a “less differentiated investment case” for the next couple of years.
As a result of these factors, Houchois downgraded his rating on Ford from buy to hold and lowered his stock price target from $17 to $15.
Ford’s stock shed 1.1% in premarket trading, reaching an eight-week low. This decrease puts the stock on track to open nearly 15% below its 10-month closing high of $15.35 on July 5th.
Houchois also reiterated his hold rating on Ford’s rival, General Motors Co., while maintaining his buy rating on Stellantis NV.
Also read: Ford recalls 900,000 F-150s for faulty electrical parking brakes that could activate while driving.
As of Friday, Ford’s stock had gained 14.0% in 2023, while GM shares had seen an increase of 13.1%, Stellantis’ stock had risen by 44.7%, and the S&P 500 index had advanced by 19.3%.
