Higher Truck Sales Will Drive Ford’s Q1 Results

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Ford Motor

Ford (NYSE:F) is expected to publish its Q1 2023 results in early May, reporting on a quarter that saw deliveries jump meaningfully led by pickup truck sales. We expect Ford’s revenues for the quarter to come in at about $36.4 billion, marking a 13% increase versus last year and about 1% ahead of consensus estimates. We expect earnings to stand at $0.41 per share, slightly ahead of consensus estimates. See our analysis of Ford’s Earning Preview for a closer look at what to expect when the company publishes Q1 results.

Although the macro picture is looking a bit more challenging for the automotive industry, due to rising interest rates, stricter credit standards, and concerns about the U.S. economy and consumer spending, Ford actually reported solid delivery numbers for Q1. The company sold a total of 475,906 units in the U.S., up 10.1% year over year as supply chain issues that the company faced over the last year showed signs of easing. Growth was driven by stronger sales of the company’s bread and butter F-Series pickups, Bronco SUVs, and electric vehicles. F-Series sales were up by a solid 21.1% to 170,377 pickups, while EV sales jumped 41%.  Now while Ford had guided that it could see average prices for vehicles decline by about 5% in 2023, due to some discounting after over a year of significant price increases, we expect the impact of this to be partly offset by a more favorable sales mix. We also expect margins to see some improvement driven by the higher volumes, cooling commodity price inflation, and higher sales of lucrative pick-up trucks. Ford has also been looking to restructure its cost base.

We think Ford’s valuation is very reasonable at current levels, with the stock trading at just 7.5x 2023 consensus earnings. We value Ford stock at about $17.50 per share, which is roughly 55% ahead of the current market price. See our analysis on Ford Valuation: Expensive Or Cheap for more details on what’s driving our price estimate for Ford.  For more information on Ford’s business model and revenue trends, check out our dashboard on  Ford Revenue: How Ford Makes Money.

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 Returns Apr 2023
MTD [1]
2023
YTD [1]
2017-23
Total [2]
 F Return -8% -1% -5%
 S&P 500 Return -1% 6% 81%
 Trefis Multi-Strategy Portfolio -2% 6% 233%

[1] Month-to-date and year-to-date as of 4/27/2023
[2] Cumulative total returns since the end of 2016

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