Ford Motor Company (NYSE: F) appears to be throttling back its efforts to shift toward producing more fully electric vehicles (EVs), and one analyst thinks this strategy makes good sense. This week, Barclays analyst Dan Levy boosted his price target on the automaker while continuing to say Ford shares should be bought.
Levy edged his price target for Ford stock up $1 to $16, but that would still represent a 27% gain over the next 12 months or so from Friday’s closing price. That positive sentiment comes a week after Ford reported that its first-quarter U.S. EV sales soared by 86% year over year.
The analyst thinks that Ford stock can go higher despite those EV sales, not because of them.
EV sales soar
Ford reported selling a little over 20,000 EVs in the first quarter domestically, so the large percentage increase reflects a jump from a low base. But it still bucks the industry trend. Overall EV sales in the U.S. grew 8% year over year in 2024’s first quarter, which was much lower than the 40% year-over-year growth seen in the fourth quarter.
Ford is also working to boost sales of EVs already produced. This week the company announced it would drop prices on its F-150 Lightning all-electric pickup truck by as much as $5,500. That comes after the company slowed production on the vehicle to offset rising inventories.
Ford’s advantage versus its competitors is that it can be flexible beyond its EV offerings. That includes a growing lineup of hybrid electric vehicles as well as its Transit commercial vans. Its Q1 sales totals for hybrids and Transit vans both set new records.
As the demand for EVs has slowed, that strategy looks to be working. It’s also why the automaker’s stock looks to be a good buy at recent levels. With its earnings and free cash flow expected to grow further this year, this analyst call is a good one.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
Ford Stock Has 27% Upside, According to 1 Wall Street Analyst was originally published by The Motley Fool
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