Ford Hit a $100 Billion Market Capitalization. The Question Is Why.

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A preproduction version of the F-150 Lightning.

Courtesy of Ford

Ford Motor passed a major milestone as its market capitalization topped $100 billion for the first time, according to Dow Jones Market Data. That makes Ford the fifth-most-valuable auto maker on the planet, but it may leave investors scratching their head.

There really wasn’t a good reason for Ford stock (ticker: F) to be up on Thursday.

Now before the bulls complain that Barron’s is being needlessly bearish, this is a call on Thursday’s trading action, rather than a view about the prospects for Ford stock (ticker: F) in the long run. Ford stock is doing very well, boosted by improving profit margins and attractive new electric-vehicle offerings.

Shares have gained about 156% over the past year, bringing the company to the $100 billion line. A year ago, the figure was $38.91 billion, more than double the pandemic low of $15.90 billion reached on March 23, 2020.

On Thursday, shares rose as high as $25.85, up almost 6%, but closed with a gain of 2.3% at $25.02. The S&P 500 and Dow Jones Industrial Average dropped 1.4% and 0.4%, respectively.

The only thing close to market-moving news about Ford was a research report from Deutsche Bank analyst Emmanuel Rosner. He took his target for the stock price to $24 from $18 a share but continues to rate the stock at Hold. What’s more, the stock closed about $1 higher than his target price.

There was a tidbit of news about Tesla (TSLA), too, but anyone who watches the stock closely wouldn’t have been surprised. There was a report on Thursday indicating that Tesla had removed some language from its Cybertruck webpage, potentially indicating a delay for Tesla’s pickup truck. The webpage has changed, but it happened back in December, or earlier, as the Twitterverse noted last year.

A report citing old news likely wouldn’t be enough to boost Ford stock, even though the all-electric Ford F-150 Lightning will compete with the Tesla Cybertruck.

Tesla stock, for its part, dropped 6.8%, but the Cybertruck probably wasn’t why. The broader market selloff is a better explanation: The Nasdaq Composite Index fell 2.5% Thursday. Richly valued growth stocks dropped again as the latest data on the producer-price index added to fears about rising inflation and higher interest rates, which reduce the current value of profits that are expected to roll in years from now.

When it was all said and down, Ford’s market capitalization stood at about $99.99 billion as of the close of trading. A small gain in after-hours trading lifted the stock to $25.10, putting the market cap back at $100 billion. Those values make Ford the fifth-most valuable auto maker in the world, based on data from Bloomberg, trailing behind Tesla, Toyota Motor (TM), Volkswagen (VOW3.Germany), and BYD (1211.Hong Kong).

That is as impressive for Ford as it is difficult to figure out exactly why it happened Thursday.

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