After a significant pullback in Ford Motor ‘s share price this year, Morgan Stanley is taking another look at the auto stock. Shares of Ford are down 40% this year, underperforming the S & P 500’s 17.5% decline. “We believe the ‘run-off’ value of Ford’s authentic/emotional ICE (internal combustion engine) vehicles and fleet-oriented commercial end markets may be under-estimated by the market,” Morgan Stanley’s Adam Jonas said in a note Friday. Morgan Stanley upgraded Ford to equal weight from underweight. The firm maintained its $13 price target on the stock, 4.5% higher than Ford’s closing price Thursday. Ford’s share price has fallen under Morgan Stanley’s price target for the first time in over 18 months, Jonas noted. Now, Ford has “a more balanced risk-reward skew,” the analyst said. The call comes after Wells Fargo this week double-downgraded Ford and General Motors to underweight ratings, saying 2022 could be “peak profits” for the legacy automakers. Morgan Stanley on Thursday also trimmed its price target on GM from $50 to $44, still representing 35.6% upside from the stock’s closing price Thursday. The firm noted the automakers are operating “during a highly uncertain economic environment and extraordinarily high dispersion of outcomes.” —CNBC’s Michael Bloom contributed reporting.
Ford’s Chief Financial Officer (CFO), John Lawler and Linda Zhang, Chief Engineer for the company’s All Electric F-150 Lightning participate in the opening bell ceremony at the New York Stock Exchange (NYSE) in New York City, New York, U.S., April 28, 2022.
Brendan Mcdermid | Reuters
After a significant pullback in Ford Motor’s share price this year, Morgan Stanley is taking another look at the auto stock.