Citi has initiated its coverage of Ford (F, Financial) with a neutral stance, setting a price target of $10. This new assessment comes as the automotive giant and its industry peers face volatile market conditions driven by ongoing tariff disputes.
The bank analyst suggested that until the tariff issues are resolved, Ford and other auto manufacturers may continue experiencing fluctuations in U.S. light vehicle sales. Despite this uncertainty, recent sales figures were stronger than anticipated in March, with optimistic trends extending into April.
Looking beyond the current challenges, Citi anticipates that once the tariff situation is clarified, underlying demographic trends in the United States will bolster vehicle demand to a range of 16 million to 18 million units annually, which is projected to be about 10% higher than 2024 expectations. This anticipated increase in demand would necessitate a replenishment of inventory levels, providing a potential boost to production.
Citi also indicates that these positive trends could enhance the financial outlook for the automotive sector as a whole. Furthermore, the firm believes that car dealerships are particularly well-positioned to manage the current uncertainties in the market.
