3 Forces That Could Shake Ford Motor Stock
Ford Motor (F) has stumbled before. It’s stock plunged > 30% in span of less than 2 months 5 times in multiple years, wiping out billions in market value, and erasing massive gains in single correction. If history is any guide, Ford Motor (F) stock isn’t immune to sudden, sharp downturns.
Despite a recent post-earnings rally, Ford navigates an uncertain road where surging hybrid demand and robust commercial sales offset persistent multi-billion-dollar losses in its ambitious EV division. The expiration of federal tax credits and looming tariff impacts cast a shadow, highlighting a delicate balance where current momentum could easily buckle under sustained electrification hurdles and geopolitical headwinds.
What Could Send The Stock Crashing?
- EV Losses: Ford’s Model e division faces projected losses of $5.0-$5.5 billion in 2025 due to high costs and pricing pressure, with F-150 Lightning demand weak. Ford is prioritizing hybrids and low-cost EVs.
- Supply Chain: A Novelis aluminum plant fire could cut FY25 EBIT by up to $1 billion, disrupting F-Series production. Semiconductor shortages and geopolitical raw material risks persist. Ford is diversifying suppliers and boosting North American output.
- Autonomy Lag: Ford’s Level 3 autonomous driving systems won’t be ready by 2025, lagging targets and competitors in advanced features. Ford continues Level 4 development and expands its Level 2 BlueCruise.
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Is Risk Showing Up In Financials Yet?
It certainly helps mitigate the risk if the fundamentals check out. For details on F Read Buy or Sell F Stock. Below are a few numbers that matter.
- Revenue Growth: 3.7% LTM and 7.8% last 3-year average.
- Cash Generation: Nearly 6.3% free cash flow margin and 1.9% operating margin LTM.
- Valuation: Ford Motor stock trades at a P/E multiple of 11.0
| F | S&P Median | |
|---|---|---|
| Sector | Consumer Discretionary | – |
| Industry | Automobile Manufacturers | – |
| PE Ratio | 11.0 | 23.5 |
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| LTM* Revenue Growth | 3.7% | 6.0% |
| 3Y Average Annual Revenue Growth | 7.8% | 5.5% |
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| LTM* Operating Margin | 1.9% | 18.8% |
| 3Y Average Operating Margin | 2.7% | 18.2% |
| LTM* Free Cash Flow Margin | 6.3% | 13.6% |
*LTM: Last Twelve Months
How Bad Can It Really Get?
When looking at risk, it helps to check how stock F fared in major market downturns. It plunged about 87% during the Global Financial Crisis and dropped 52% in the Dot-Com bubble. The Covid crash and inflation shock both saw roughly 56% declines. Even the 2018 correction wasn’t gentle, with a dip close to 38%. These numbers show that even solid setups can take big hits when the market turns south. No matter the strength, sharp sell-offs often catch most stocks off guard.
But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read F Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.