Shares of Ford (NYSE:F) are down over 10% after the company reported earnings for the fourth quarter. While the automaker’s revenue of $37.7 billion beat expectations, its adjusted earnings per share (EPS) of 26 cents fell short of expectations of 45 cents. However, Ford did manage to end the quarter with a healthy cash pile of more than $36 billion. So, what else should you know about F stock following Ford’s Q4 earnings today?
During Q4, Ford experienced problems related to the global semiconductor shortage. The shortage affected Ford’s production capacity across several product lines. In addition, the shortage may continue well into 2022. Ford posted 2022 full-year guidance of $12 billion in operating profit, which was in line with analysts’ expectations. Furthermore, the automaker expects global vehicle deliveries to increase by 10% to 15% this year. However, it seems investors were expecting higher guidance, as evidenced by the stock decline today.
For the full year of 2021, the automaker reported net income of $17.9 billion. However, Ford’s Rivian (NASDAQ:RIVN) investment accounted for a $8.2 billion paper gain that was included in net income. Without Rivian’s contribution, Ford’s 2021 net income falls to $9.7 billion, which still represents a significant increase from 2020’s net loss of $1.3 billion. Ford has been invested in Rivian since 2019, which was before Rivian’s initial public offering (IPO). In total, Ford has invested $1.2 billion into RIVN stock, which represents a 12% ownership stake. As of early December, that stake was valued at more than $10 billion. However, since Dec. 1, Rivian has lost over 40% of its market capitalization.
With that in mind, investors are wondering how Wall Street feels about F stock. Let’s jump right in.
F Stock Price Predictions
- RBC Capital has a price target of $26. Interestingly enough, analyst Joseph Spak downgraded F stock from outperform to sector outperform, although he raised his price target from $21 to $26. To explain this, Murphy added that “near term upside looks a little more challenging.” Additionally, the analyst believes that Ford’s transition is “well underway,” and that the automaker can “continue to transition towards a EV/AV/software world.”
- Bank of America has a price target of $26. Analyst John Murphy increased his price target from $22 last month. Murphy touts Ford’s ability to “retain loyal customers and attract new ones.” In addition, the analyst believes the upcoming F-150 Lightning e-truck and increase in EV investments will act as a “tipping point” for Ford in the transition from internal combustion engine (ICE) vehicles to EVs.
- Jefferies has a price target of $25. Analyst Philippe Houchois believes that it is “premature to re-rate legacy OEMs for their EV progress since earnings remain mostly driven by cyclical shortages.” Houchois formulated his price target before Ford reported earnings, and it seems that he was right about the semiconductor shortage. In addition, the analyst sees Tesla (NASDAQ:TSLA) as an “industry threat.” However, Houchois believes that Ford can grow earnings this year in the U.S. as well as in international markets like Europe and Latin America.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.