The price of Ford Motor Company stock (NYSE:F) has advanced from $4.01 above $7.50 in less than six months and the current price stands around $7.25. The next several months will be competitive for the global auto industry but even with the COVID-19 pandemic, the sale of Ford cars is going very good.Fundamental analysis: Ford is expanding its production
Ford Motor Company is an American multinational automaker that sells automobiles and commercial vehicles under the Ford brand, and most luxury cars under the Lincoln brand. At the current stock price, Ford could be a very good long-term investment with a generous yield and solid growth prospects.
Last week, Ford unveiled plans to build the electric F-150 EV that is designed for hard-working customers that need a truck to do a job. Ford is confident about the electric F-150, this will certainly add new customers and increase the revenues of the company. The company also is expanding its production with the Ford Bronco and expectations are that Bronco will appeal to a younger demographic.
Some estimates say that the auto market is expected to grow only slightly in the next several years but the Ford Company will be one of the major players. The company decreased its revenue in 2019 to $143.64B from $148.32B in 2018 but the growth projects will ensure that the numbers will be moving up in the future.
If we compare total stockholders’ equity of $30.85B and the market capitalization of $28.96B, we can notice that this stock is not overvalued and maybe now could be a good time to buy this stock. Another useful information for potential investors is that this company has paid more than $7B dividends to its shareholders in the last three years and this number can be even bigger in the future.
There are some obvious risks when it comes to buying Ford stock and there are several negative facts that are connected with this company. The negative fact is that the company is targeting to eliminate 1,400 U.S. salaried jobs by year and some rumors say that the company could face problems with cash flow.
Despite this, the company is preparing for a safe and staged return to normal operations and the revenue will probably raise in the future.Technical Analysis: Ford has a very good risk/reward ratioData source: tradingview.com
In my opinion, this stock has a very good risk/reward ratio and investors in Ford stand to gain a lot more for taking a comparatively smaller risk. On this chart, I marked current resistance and support levels.
The current supports levels are $7 and $6, $8 and $9 represent the current resistance levels. If the price jumps above $8 it would be a “buy” signal and we have the open way to $9. Rising above $9 supports the continuation of the bullish trend and the next price target could be located around $10. If the price falls in the upcoming period, every price in a range from $5- $6 could be a very good opportunity to invest in this stock.Summary
Shares of Ford could be a good investment option and most financial analysts are also expecting its price to rise considerably in the next several years. Last week, Ford unveiled plans to build the electric F-150 EV that is designed for hard-working customers that need a truck to do a job. Ford is confident about the electric F-150, this will certainly add new customers and increase the revenues of the company. The company also is expanding its production with the Ford Bronco and expectations are that Bronco will appeal to a younger demographic.