DETROIT — Ford engine on Monday it would try to convince skeptics about its plans to develop electric vehicles, which some Wall Street analysts have called “ambitious” and “insane”.
The Detroit-based automaker will host a capital markets day where it has promised to provide details on how Ford expects to meet its previously set targets of 8% EBIT margin per unit of electric vehicles and a couple of million electric vehicle production by 2026. expected 600,000 by the top of the yr.
related investment news
“We’ll explain to you why we expect an 8% margin is perfectly realistic, despite all of the pricing pressure we’re absolutely going to get, because everyone wants to grow,” CEO Jim Farley said in the course of the company’s first-quarter earnings call earlier this month.
The event is named “Delivering Ford+” a reference to Farley’s recovery and restructuring efforts, which some criticized for not being done quickly enough. Farley announced the plan seven months into his tenure, in May 2021.
The carmaker’s CEO described the capital markets day as a chance to show how the strategy is “coming to life”. The corporate is anticipated to pursue profits for its traditional “Ford Blue” and “Ford Pro” industrial businesses, as well as to its “Model e” electric vehicle unit.
Ford can also be expected to showcase second-generation battery products and technology that the corporate says might be critical to achieving an 8% EBIT margin. The electrical vehicle business is anticipated to lose about $3 billion this yr.
Ford has previously said it expects to achieve this profit margin mainly due to scale, improvements to EV batteries, and efficiencies in design and engineering.
“Definitely some analysts are skeptical,” Morningstar analyst David Whiston told CNBC. “I feel Monday is a chance to try to convince some of these skeptics that this might occur. Personally, I’m willing to give them the profit of the doubt…you will have to convince people.”
Whiston described the goals’ schedule as “tight”. Others were more critical.
Morgan Stanley analyst Adam Jonas, when announcing Ford’s first-quarter results, described the expansion in electric vehicle production as “insane”. Barclays analyst Dan Levy, in a note to investors this week, called it “ambitious”.
“Currently, we’re skeptical about Ford’s ability to meet each targets as we expect it to select a balance of volumes with profit opportunities,” said Levy.
Analysts don’t expect an enormous move within the stock market after the event, unless Ford surprises with a latest product or a change in previously announced plans.
“Overall, we consider Ford’s key targets are unlikely to differ from its last training session, but management will try to make investors feel more comfortable around them,” Deutsche Bank analyst Emmanuel Rosner said in a note to investors, echoing the corporate’s sale . stock rating.
According to analyst rankings and estimates compiled by FactSet, Ford shares are rated “hold” with a mean price goal of $13.63 per share.
Ford shares are up about 75% since Farley became CEO in October 2020. Ford shares closed at $11.65 a share on Friday.
– CNBC Michael Bloom contributed to this report.