Ford Motor Co. stock fell more than 10% on Friday to hit its lowest in more than three months after Wall Street faulted the auto maker for its bottom-line miss and light volumes amid ongoing supply problems.
Ford stock F, -10.33% was on track for the lowest close since Oct. 29, when it closed at $17.08, and its largest one-day percentage decrease in nearly two years.
Ford late Thursday reported fourth-quarter profit and sales that fell short of expectations, saying that “persistent supply-chain disruptions” hampered its ability to meet strong demand.
Chief Executive Jim Farley expressed optimism about the company’s trajectory in electric and autonomous vehicles, saying that Ford is to “compete like the challenger” and “speak with our actions,” but also that the company remained “in the teeth of the COVID crisis and semiconductor shortages” despite being in “great shape” overall.
Ford’s miss “was a combination of lower volumes (chip shortage/supply chain disruption), higher raw material costs, and higher mobility spending,” John Murphy at B. of A. Securities said in a note Friday.
Murphy kept his buy rating on the stock, however, saying despite the “the tough finish to 2021,” Ford’s 2022 financial outlook is strong.
Ford “will strengthen its core business pillars to fund its future business,” he said. “And despite the tough macroeconomic backdrop, we continue to believe Ford is just starting to hit a more sustainable inflection in earnings.”
Ford guided for a 2022 volume between 10% and 15% despite continued supply volatility, which is “more consistent with market views and keeping GM’s 25-30% an outlier for now,” said Philippe Houchois with Jefferies.
The auto maker also guided EBIT growth between 15% and 25%.
Ford’s 2022 guidance would have been “good enough” in a “quiet tape,” Chris McNally with Evercore ISI said in his note. The quarter, however, was not “pretty,” showing the miss.
Ford did show progress on the two “forward ‘races’ that matter,” margins and EV sales, McNally said.
Dan Levy with Credit Suisse seemed to concur: “While Ford’s 4Q miss was disappointing, we believe the focus of the 4Q print should be a ’22 guide which shows Ford is continuing its path of improvement,” he said.
Last year showed “the significant turnaround under way at Ford, and one which has occurred within a short period of time,” Levy said. “Changing perception on both these fronts is critical, as near-term financial strength is supporting better funding of Ford’s long-term transition.”
And that transition “has just begun,” with Ford’s push “to go deeper in supply/sourcing (and) decrease complexity. The transition won’t be easy, but the efforts could make Ford well positioned in an industry defined by EV and software in vehicles,” he said.
Despite Friday’s losses, Ford stock still holds on to a significant outperformance in the past 12 months, up more than 55% compared with an advance of around 16% for the S&P 500 index. SPX, +0.35%