Momentum Stock: Ford Motor (F)

Ford Motor, Inc. (F) just reported another awesome quarter, demonstrating that the company’s turnaround strategy continues to accelerate. With rising estimates, a bullish next-year estimate and an attractive valuation, Ford isn’t running short on momentum.

Second-Quarter Results

Ford’s Q2 results from July 23 built on the company’s recent string of earnings surprises. Revenue for the period was up 17% from last year to $31.3 billion. When excluding the results of Volvo, which Ford has since sold, sales were up 30%.

Earnings for the period came in at 61 cents, well ahead of the Zacks Consensus Estimate of 40 cents, moving the company’s four-quarter earnings surprise to 112%.

Ford’s year-over-year comps are pretty amazing, with its pre-tax operating profit coming in at $2.9 million for the quarter, a $3.5 billion improvement from last year.

The company’s profound global footprint is also paying off, with its North American, South America, European and Asia/Africa all showing amazing gains from last year.

Balance Sheet Improving

Ford also continue to work on its balance sheet, reducing its total debt load by $7 billion to $27 billion, which will enable the company to save about $480 million in annual interest payments.


Although its still a bit early for any pending estimate revision to hit the consensus, we have seen a steady trend higher over the last few months, with the current year up 32 cents in the last 90 days to $1.35 and the next-year estimate up 17 cents to $1.59, a solid 18% growth projection.


In spite of the outstanding gains and general enthusiasm, Ford still has a ridiculous valuation, trading with a forward P/E of 9X compared to its peer average of 27X.

2-Year Chart

Shares of F recently rebounded from a key trend line after dipping lower with the market in May and June. The MACD below the chart also looks bullish, with the short-term moving average trading ahead of its long-term counterpart. Look for support from the trend line and the short-term low on any weakness, take a look below.

Last Week’s Momentum Zacks Rank Buy Stocks

AO Smith Corp. (AOS) has jumped higher over the last few days on a 22% earnings surprise that has shares trading within a few Dollars of the multi-year high at $56.64. Even though estimates are on the rise, shares still trade at a discount to their peers, providing plenty of upward momentum for this Zacks #1 rank stock. Read Full Article.

Apple, Inc. (AAPL) just reported another awesome quarter that produced a solid 14% earnings surprise as the iPhone and iPad supercharge the company’s bottom line. Estimates are once again on the upswing for this Zacks #1 rank stock that many analysts are calling the best company in the world. Read Full Article.

NetApp, Inc. (NTAP) has barely batted an eye at the weak market of the last few months, recently hitting a new all-time high at $40.64 after reporting a solid 18% earnings surprise in late May. With the next-year estimate projecting 11% growth, the longer term picture looks good too. Read Full Article.

InterContinental Hotels Group, Inc. (IHG) recently rebounded from a key trend line after hitting a new multi-year high above $18 in mid June. This Zacks #1 stock has seen its estimate move higher since posting a solid 60% earnings surprise in early May. Read Full Article.

FORD MOTOR CO (F): Free Stock Analysis Report
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About Michael Vodicka 49 Articles

Affiliation: Zacks Investment Research

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