It’s all change in the auto industry, which is currently in the midst of one of its biggest transformations of the past century. The rise of EVs and autonomous vehicles has signaled a whole new approach to auto design.

By now it’s clear that adapting to this changing landscape is a do or die moment for legacy automakers. As such, industry giants such as Ford (F) are also pivoting toward this new opportunity.

The market has noticed this and has rewarded the legacy name for its efforts. Ford shares have appreciated by 80% over the past 12 months.

However, heading into 4Q21’s earnings this afternoon, Credit Suisse analyst Dan Levy thinks the stock could push higher still.

“Even after what has been incredible performance in Ford stock, we still see room for upside as the narrative surrounding Ford transitions,” the analyst said. “Specifically, Ford (and GM) both see upside from multiple expansion as the market better appreciates opportunity to transition to an EV / Auto 2.0 world.”

Levy believes the company’s EV transitioning strategy is a good one, and notes that consumers have reacted positively to its EV product offerings while the company has been taking a “more aggressive approach on boosting its EV supply.” It is also seen as having one up over rival GM with the soon to be available Mach-E and F-150 Lightning. “Moreover,” adds Levy, “We see Ford’s near-term operational strength as an opportunity to accelerate progress in the transition (i.e. mastering its ‘balance of the two clocks’).”

As for what to expect from the financial statement, Levy is “modestly ahead of consensus,” anticipating 4Q EPS of 54c vs. the Street’s 44c, while his 4Q EBITDA forecast of $3.0 billion is also just a touch above the consensus estimate of $2.9 billion. Looking ahead to Ford’s guide, as volume recovery “more than offsets price/mix/captive finance normalization,” Levy expects the company will guide to year-over-year “improvement.”

All in all, the analyst maintained an Outperform (i.e. Buy) rating on Ford stock, while lifting the price target to $26 (from $23). Should the target be met, investors are looking at upside of ~30%. (To watch Levy’s track record, click here)

Story continues

Levy’s new objective is just a touch above the Street’s average target, which at $24, suggests shares have room for ~20% growth over the coming months. Looking at the consensus breakdown, based on 7 Buys and Holds, each, plus 2 Sells, the analysts’ view is that this stock is a Moderate Buy. (See Ford stock forecast on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

(305) 707 0888