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Sterne Agee says Ford can generate record cash

DETROIT (AP) -- Sterne, Agee and Leach analyst Michael Ward said Monday that he expects Ford Motor Co. to generate record amounts of cash over the next few years. He maintained his "Buy" rating and price target of $17 on Ford's shares.

THE OPINION: Ford ended 2012 with a net cash balance in its auto operations of $9.9 billion, up from $9.8 billion in 2011. Ward expects additional improvement in Ford's cash balance over the next few years.

Ford is facing some big expenses, including contributions to global pension plans, acceleration of product development programs and increasing dividends. Ward said Ford can meet those obligations and still make money because of the restructuring actions it took during economic downturns in the U.S. and Europe and its disciplined spending. Ward also expects a muted but sustainable recovery in U.S. auto sales that should help Ford avoid the boom-and-bust cycles it saw in the last decade.

THE SHARES: Ford rose 21 cents, or nearly 2 percent, to $12.65 in midday trading. The stock has traded between $8.82 and $14.30 over the past 52 weeks. It is down more than 2 percent since the start of the year.