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Ford shares hit 52-week high on car sales optimism

NEW YORK (AP) -- Ford Motor Co. shares hit another 52-week high Friday on investor optimism that the automaker will continue to benefit from strong global demand for cars and trucks.

THE SPARK: Sterne Agee raised its price target for Ford's stock by $2 to $17, citing strong vehicle demand in North America and new optimism about prospects in South America. Meanwhile, Goldman Sachs added Ford to its "Conviction Buy" list, saying the company is poised to benefit from rising global demand.

THE BIG PICTURE: Automakers continue to benefit from the recovery in new vehicle demand, both in the U.S. and many international markets.

But tough economic conditions continue to drag down their European sales. In response, Ford has announced plans to cut capacity, speed up product launches and find ways to lower costs through the use of global platforms in hopes of boosting its profitability there.

THE ANALYSIS: "In our view the industry in North America will continue to recover in 2013 and in 2014," wrote Sterne Agee analyst Michael Ward, who also backed his "Buy" rating on the automaker. "Ford's new product cadence, the benefits of restructuring actions, positive pricing and favorable mix, in our view, will produce record financial results over the next few years."

Ward also boosted his earnings predictions for this year and next by 5 cents per share, predicting a 2013 profit of $1.65 per share and a 2014 profit of $1.90 per share. Analysts polled by FactSet expect earnings per share of $1.46 in 2013 and $1.85 in 2014.

Meanwhile, Goldman's Patrick Archambault said the automaker has some of the highest profit potential in the industry, pointing to a potential recovery in North American pickup truck demand, the unappreciated potential of its global products and the benefits of its European restructuring.

THE SHARES: Up 14 cents to $13.98 in afternoon trading, after peaking at $14.07 earlier in the session and passing their previous 52-week high of $13.90. Ford shares have been on a steady march up for the past several months, rising about 55 percent from their August lows.