Ford (NYSE:F) is having a good April. It’s launched two attractive SUVs, and Ford stock is up 12% over the last month.
I wasn’t sure if Ford stock would ever climb out of sub-$8-territory, but it sure has, putting the owners of Ford stock in a much happier frame of mind.
F stock appears to be coming out of hibernation just in time for spring.
As I said in my most recent article about Ford in March, I have a love-hate relationship with Ford. With F stock under $10, I considered it a value play for patient investors. However, in the end, when it came to recommending Ford stock, I hedged my bets. Specifically, I suggested that investors who were thinking of putting $10,000 into Ford take $7,500 of it and buy Ferrari (NYSE:RACE) instead.
In the month since, if you put 100% of a $10,000 bet in Ford stock, you’d be up 10.6%. If you did what I suggested — 75% RACE, 25% F — you would be up by 6.0%.
While it’s early days since I made my pick, Ford stock is certainly holding its own.
Can it F stock hit $20 within the next 12-18 months? I think it’s got a shot.
When Ford launched its all-new 2020 Escape SUV April 3, I was blown away by its design. Of course, that’s partly because the current edition looks awful.
“Crossovers are the largest segment in the U.S. at nearly 40 percent of all new vehicle sales annually. Ford’s crossover lineup has gotten old relative to [General Motor’s], so the Escape and Explorer both out this year will be a big help in that regard,” said Morningstar Research Services equity strategist David Whiston.
The second Ford vehicle to catch my eye was the Lincoln Corsair, which is scheduled to go on sale in the fall; sharing some of the same components as the Escape, it’s a looker.
“ The 2020 Corsair’s considerably nicer interior, a competitive array of tech features, and reserved exterior design seem poised to make it a significantly more competitive entry in the tough compact-luxury-SUV segment,” stated Car and Driver contributor Joey Capparella April 17.
The SUV market is super competitive. Only the best-looking vehicles are going to win market share. That’s especially true given how expensive these vehicles can get once you add all the bells and whistles.
As Capparella noted, the Corsair’s base price will likely come in at slightly more than $35,000, but it could quickly rise to $60,000 once options are added.
That’s a lot of money to pay for a severely depreciating asset. But its looks will bring people interested in buying a small luxury SUV into the Ford showroom.
Six months ago, Ford couldn’t do that. All it had was the F-series. The Corsair is potentially a game-changer.
The Bottom Line on Ford Stock
As I’ve already said, Ford is designing better-looking vehicles which gives it a good shot of competing in the U.S. and elsewhere.
A third vehicle that could add some horsepower to Ford stock is the Mustang-inspired SUV, an electric crossover intended to compete with Tesla’s (NASDAQ:TSLA) Model Y. It may be available by the end of 2020, and it’s said to have a range of 370 miles.
I don’t do a lot of road travel, but my wife does have a significant commute. We’re looking to replace our Jeep Cherokee with a hybrid or electric SUV. If we go fully electric, it’s got to have a minimum range of 300 miles to meet my wife’s driving requirements.
We’d be willing to consider waiting until the end of 2020 before we choose one from Ford or another manufacturer.
Six months ago, there was no way I would have said that.
So, from my perspective, Ford is making headway. Is it enough to get Ford stock to $20?
What I do know is that the owners of Ford stock ought to be breathing a little easier as we head into the second half of 2019.
At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.
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