F

Ford Motor Co.

Industrial/Transportation


Presented:11/28/2022
Price:$13.73
Cap:$55.20B
Current Price:$10.84
Cap:$43.09B

Presented

Date11/28/2022
Price$13.73
Market Cap$55.20B
Ent Value$134.59B
P/E Ratio6.21x
Book Value$10.18
Div Yield3.64%
Shares O/S4,020.64M
Ave Daily Vol65,167,821
Short Int3.74%

Current

Price$10.84
Market Cap$43.09B
Ford Motor Co. engages in the manufacture, distribution, and sale of automobiles. It operates through the following segments: Automotive, Mobility, Ford Credit, Corporate Other, Interest on Debt, and Special Items. The Automotive segment develops, manufactures, markets, and services Ford and Lincoln vehicles, service parts, and accessories. The Mobility segment includes the development of autonomous vehicles, equity ownership in Argo AI which is a developer of autonomous driving systems, and related businesses. The Ford Credit segment consists of vehicle-related financing and leasing activities. The Corporate Other segment covers corporate governance expenses, interest income, gains and losses from cash, cash equivalents, and marketable securities, and losses associated with intercompany lending. The Interest on Debt segment is composed of interest expense on company debt excluding Ford Credit. The Special Items segment deals with pension and employment benefit remeasurement gains and losses, gains and losses on investments in equity securities, significant personnel expenses, and other items that are not considered to be indicative of earnings from ongoing operating activities. The company was founded by Henry Ford on June 16, 1903, and is headquartered in Dearborn, MI.

Publicly traded companies mentioned herein: Ford Motor Co (F), General Motors Co (GM)

Highlights

The presenter is short shares of Ford Motor Co (F), which trades at $14 per share, implying a healthy 7x multiple on a peak earnings figure (consensus 2022 EPS is $1.99) that may never be matched. Supply chain issues in the last two years have allowed car manufacturers to take significant price, leading to margin expansion. Ford’s price increases and FinCo profit growth over the last two years now make up the entirety of total profits. With supply chains loosening and high interest rates, affordability of both new and used cars is problematic. Based on price normalization, demand inflecting negatively, and incremental investment in EVs, he underwrites EPS of ~$1 in 2023 and values the stock at $10 per share assuming a strong 10x multiple. 

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Idea Discussion

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