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Ford Motor Touches New 52-Week High

Zacks Equity Research

Shares of Ford Motor Co. (F) reached a new 52-week high of $16.21 on Jul 2, which is above its previous level of $16.09 on Jun 4, and closed at $16.18 on the same date. The closing price represented an impressive one-year return of 76.6% and strong year-to-date return of 24.4%.

The world’s leading automaker has a market cap of $61.9 billion. Average volume of shares traded over the last three months stood at approximately 41,874.2K.

Shares of the company started escalating following the release of its impressive first quarter results on Apr 24 as well as continuous improvements in the automotive market.

Ford posted an increase of 4.1% in earnings to $1.6 billion and 5.1% in earnings per share to 41 cents in the first quarter, beating the Zacks Consensus Estimate by 3 cents. Revenues improved 10.5% to $35.8 billion, exceeding the Zacks Consensus Estimate of $32.8 billion.

The increase in revenues and earnings was mainly attributable to Ford’s strong performance in North America and Asia-Pacific Africa. However, the company’s results were disappointing in South America due to unfavorable exchange rate as well as in Europe due to the sluggish economy.

In 2013, Ford expects its market share in the U.S. and China to exceed that of 2012, while Europe is expected to remain at the same level.  Its market share in 2012 was 15.2% in the U.S., 7.9% in Europe and 3.2% in China.

Further, U.S. automotive industry continues to improve driven by continued macroeconomic recovery, aging vehicles on the U.S. roads and strong demand for commercial vehicles from businesses. Vehicle sales in June are expected to reach its highest level in nearly half a decade, indicating increased economic activities.

Currently, shares of Ford retain a Zacks Rank #3 (Hold). Some stocks that are performing well in the automotive industry include Nissan Motor Corp. (NSANY), Fuji Heavy Industries Ltd. (FUJHY) and Honda Motor Co. (HMC). Both Nissan Motor and Fuji retain a Zacks Rank #1 (Strong Buy), while Honda Motor holds a Zacks Rank #2 (Buy).

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