When Ford (F) peaked at over $25, the stock market gave suffering shareholders a rare gift. Investors
who ignored Ford’s glowing remarks on its electric vehicle plans locked gains. Ford, which holds billions
of dollars worth of rival Rivian (RIVN), lost half its value from its peak.
When Rivian posted poor quarterly revenue but insisted it would meet its output targets, the stock
bottomed at $20. Now at ~ $31, an uptrend in the stock will benefit Ford.
Last week, Ford delivered its first EV truck, the F-150 Lightning, to a retail customer in Michigan. The
company plans to make around 40,000 trucks this year. It will get ahead of Rivian, Tesla (TSLA), and
General Motors (GM) with the latter’s Silverado Electric launch.
Investors are starting to bet that F stock bottomed at these levels. But Ford has many significant
headwinds. First, it needs to increase product quality and minimize recalls. Second, it needs to lower
operating costs to align with lower output. The supply chain disruption is nowhere near over. Ford will
have many incomplete products it cannot sell yet.
For now, investors will overlook Ford’s weak quarterly results. The company reinstated its dividend.
From here, it needs to post higher profit margins despite the macroeconomic difficulties ahead.
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