The realm of electric vehicles (EVs) continues to reverberate with resounding success, debunking any whispers of a sluggish market. Recent data on second-quarter EV sales in the United States underscore this sentiment. Major players in the automotive industry have reported remarkable EV deliveries, signaling an upward trajectory that defies previous skepticism.
Renowned e-mobility leader Tesla set a new benchmark by delivering 443,956 vehicles globally in the second quarter, surpassing analyst projections. Close on Tesla’s heels, American automotive stalwart Ford emerged as the second-largest EV brand in the U.S. market for the same period, outstripping domestic competitor General Motors, which also boasted record EV sales during the quarter.
While challenges such as high prices and infrastructure limitations persist for zero-emission vehicles, the overall outlook for the EV sector appears more sanguine than previously perceived. The horizon of mobility is unmistakably veering towards electrification, and Ford is positioning itself strategically to cement its presence in the evolving EV landscape.
Exploring Ford’s robust performance in EV sales, potential long-term drivers, and the prospects of investing in its stock unveil a narrative of growth and resilience in the face of evolving market dynamics.
Ford’s Impressive Q2 EV Deliveries
Ford notched up 23,957 EV sales in the second quarter of 2024 in the United States, marking a notable 61% surge from the previous year. Sales figures for models such as Mustang Mach E, F-150 Lightning, and E-Transit surged by 46%, 77%, and 96%, respectively, underscoring the widespread consumer appeal of Ford’s diverse EV lineup.
The cumulative EV deliveries in the first half of 2024 exceeded 44,000 units in the country, reflecting a robust 72% increase year-over-year. Ford’s sustained growth enabled it to maintain its lead over GM in the U.S. EV market, as GM reported 21,930 EV deliveries in the second quarter, amounting to 38,355 units in the first half of the year.
Ford Model e Unit Poised for Long-Term Growth
Ford’s EV segment is strategically positioned for future expansion through a comprehensive growth strategy. The company’s pivotal initiatives include scaling operations, optimizing digital capabilities for enhanced manufacturing efficiency, and emphasizing vertical integration by bringing crucial components in-house. Ford aims to boost integration by nearly 50% in the next generation of utility vehicles, highlighting its commitment to sustainable growth.
Ford Blue & Pro Units Also Spark Optimism
Within the Ford Blue segment lies significant growth potential, particularly with sought-after models like the F-150, Maverick, Bronco, and the iconic Mustang. An upcoming wave of new products, including revamped versions of the F-150 and Ranger, along with the all-new Explorer, Expedition, and Navigator, are poised to bolster revenues and further solidify Ford’s market presence.
Meanwhile, the Ford Pro segment’s optimistic outlook stems from strong order volumes, growing demand signals, and the successful launch of the all-new Super Duty lineup. Bolstered by these factors, the segment is well-positioned to leverage opportunities and drive substantial growth, with an anticipated 24.3% year-on-year increase in adjusted EBIT for 2024 attributed to favorable mix and volume dynamics.
Price Performance & Valuation
Despite a 15% decline in its share price year-to-date, Ford’s solid fundamentals and attractive valuation metrics present a compelling opportunity for investors to consider entering the market at current levels, riding on the company’s growth trajectory.
Trading at a discount relative to its industry peers and with a Value Score of A, Ford’s forward sales multiple stands at 0.31, indicative of its favorable positioning within the market.
Ford is Worth Buying Now
While the Ford Model e unit may encounter short-term setbacks this year, the company’s long-term outlook remains promising. Emphasizing profit growth, electric mobility, and customer satisfaction through the Ford+ program, Ford showcases a commitment to sustained success.
With a robust liquidity position exceeding $43 billion, Ford is well-equipped to pursue its strategic priorities under Ford+, with a pledge to allocate 40-50% of free cash flow towards shareholder returns. Forecasts for 2024 and 2025 point upwards, underpinned by a favorable trajectory for the stock.
Additionally, Ford’s trading trends above its 50-day and 200-day moving averages signal an optimistic outlook among investors, further substantiating the case for long-term investment in the company.
Fords Above 50 & 200 Day SMA
Image Source: Zacks Investment Research
Investors eyeing substantial long-term returns may find Ford an alluring investment opportunity at its current valuations. The stock currently holds a Zacks Rank #2 (Buy).
