Ford Motor Co (F, Financial) experienced a notable drop of 3.79% in its stock price, following a downgrade from Goldman Sachs. The investment bank shifted its rating from "Buy" to "Neutral," primarily due to concerns surrounding trade tariffs on imported vehicles and car parts. These tariffs are expected to put pressure on profit margins and possibly disrupt supply chains across the automotive industry.
Currently trading at $9.14, Ford's market capitalization stands at $36.35 billion, highlighting its substantial influence within the automotive industry. Despite the recent decline, Ford's price-to-earnings (PE) ratio of 6.26 is significantly lower than the industry median, suggesting potential undervaluation. Moreover, the stock is trading at a price-to-book (PB) ratio of 0.81, which is close to its three-year low.
According to the GF Value assessment, Ford is identified as a "Possible Value Trap, Think Twice." The company's GF Value is calculated at $13.25, indicating a potential upside from its current trading price. For more information, you can visit the GF Value page.
While Ford has several positives, such as a dividend yield close to its one-year high and a Beneish M-Score indicating it is unlikely to be a manipulator, there are significant concerns. The company's financial strength is in question with an Altman Z-score in the distress zone, suggesting a possibility of bankruptcy within the next two years. Additionally, Ford's return on invested capital (ROIC) is less than its weighted average cost of capital (WACC), implying potential inefficiencies in capital use.
Investors should remain cautious and consider these mixed signals when evaluating Ford (F, Financial) as a potential investment, especially in light of recent economic challenges and the company's debt levels.
