One Morgan Stanley analyst believes so.
We all know the Ford F-150 has been the best-selling vehicle in the US for over 30 years, but it turns out the full-size pickup truck could be even more valuable than we thought. The Detroit News has a very interesting report about a Morgan Stanley equity analyst that believes the F-150 franchise could be worth more than Ford the automaker. The analyst, Adam Jonas, also raised his price target for the automaker from $10 to $15, the first sign of confidence from the financial firm in Ford’s earning forecast in nearly five years.
According to Jonas, “The company has made significant changes to senior management but investors lack confidence in Ford’s ability to address chronically loss-making businesses and its potential to pivot into areas of growth (like) shared (and) autonomous.” Ford also said it plans to save money by moving away from car production to build more SUVs and trucks. But what’s really interesting is Jonas’ claim that Ford is undervalued, specifically given the value of the F-150 franchise as a whole. “We see Ford as an out-of-favor self-help story with room to surprise the market with cost-savings and profit-repositioning potential,” Jonas wrote.
“At its current depressed valuation level, the value of its commercial franchise (F-Series) represents a larger percentage of its firm value than any other OEM under our global coverage.” F-Series trucks continue to sell extremely well in the US, and with gasoline prices being as generally cheap as they are, the sales forecast continues to look bright. Along with Ford’s continued move into autonomous and electric vehicles and expected plan to reduce nameplates and/or exit unprofitable global markets, Jonas believes Ford could drive up its stock price as well. For now, however, the F-Series continues to be the automaker’s main bright spot.
Question is, how much longer can that continue given the changing automotive landscape with, for example, shared mobility? Jonas and other Wall Street analysts want Ford to be more transparent in its future product plans so that they can better valuate the automaker’s value. Later this week Ford will outline what it’s planning over the next 24 months, so that’s certainly a step in the right direction. But for now, the F-Series trucks continue to outshine the company as a whole.