Wells Fargo analyst Colin Langan downgraded Ford to Underweight from Overweight with a price target of $12, down from $24. Battery electric vehicle costs have “massively risen” and raw material supply is tight, yet tough U.S. regulations likely require more BEV sales, Langan tells investors in a research note. The analyst says the raw material increase adds $4,800 and $8,500 in unplanned costs to the FordMach-E and Lightning, respectively. More importantly, Ford relies on F-Series for over 60% of its profits historically, making possible substitution away from the combustible engine F-Series to the Lightning a “material risk,” writes the analyst. Silverado to the electric version a “material risk,” writes the analyst. In addition, he sees headwinds from price normalization, inflationary costs and the 2023 UAW contract negotiations.
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