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Baron Issued a positive comment on Ford Motor Company (New York Stock Exchange: F) in its latest release, noting that despite a sharply weak performance this year, the Dearborn, Michigan-based automaker is poised to close the gap with Detroit rival General Motors (NYSE: General Motors).
Ford (F)) has gained just 7% so far this year, while General Motors has gainedGeneral Motors) is up more than 29% compared to the S&P 500’s rise of about 17% (spy).
“It’s not often that one of America’s two largest automakers lags the other in performance.” Baron He wrote, adding that the duo are not that different financially, but investors have not yet realized that.
However, for one weak performance to close the gap, “it just takes a catalyst,” the prospectus said, claiming that capital discipline would be key to this turnaround.
Expected special dividends of up to $2.60 per share, lower spending on electric vehicles, and an increased focus on quality, and thus lower warranty expenses, are expected to help bolster this narrative.
The booming U.S. auto market will also be a tailwind, with Americans expected to buy 16 million new cars in 2024, up from about 15.5 million in 2024.
“Taken together, the capital budget cut may be the best sign that Ford is taking its stock price seriously. Investors shouldalso,” Baron Argue.
However, according to Seeking Alpha’s Quant System, Wall Street analysts, and Seeking Alpha analysts, Ford (F) stock remains flat.
South African financial analyst Manuel Paul Diebold issued a sell rating on Ford (F) this week, arguing that its most important market, the United States, is “stagnant” and its valuation is cheap only by non-GAAP measures.