Ford Deserves To Be Put On Your Watchlist (Technical Analysis) (NYSE:F)

Introduction

As Ford Motor Company (NYSE:F) has moved into being more of a truck-only vehicle manufacturer, this has proven to be a success story for the company. However, as the automotive industry can be cutthroat, it is no wonder the future stock price of Ford may not be a star performer. Ford does provide some consistent profit in its stock price, but it is worth considering a lower quantity of stock to hold.

Fundamentals Have Been Flat

Ratios

Ford’s current ratio and quick ratio have been relatively flat and even in decline since 2017. As a result, Ford needs to be more innovative to impact its organic growth.

Metric	2017	2018	2019	2020	2021
Period	FY	FY	FY	FY	FY
Current ratio	1.225	1.200	1.162	1.201	1.201
Quick ratio	1.075	1.041	0.994	1.053	1.031
Cash ratio	0.195	0.175	0.178	0.260	0.226

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Source: Financial Modelling Prep

Growth

As stated earlier, revenue and gross profit growth have not been favorable for 2019 and 2020. Unfortunately, 2021 was not a strong-enough year to show any recovery from these negative periods.

Metric	2017	2018	2019	2020	2021
Period	FY	FY	FY	FY	FY
Revenue growth	0.033	0.023	-0.028	-0.184	0.072
Gross profit growth	0.009	-0.054	-0.119	-0.321	0.507
Ebit growth	0.069	-0.090	-0.955	-8.679	2.026
Operating income growth	0.069	-0.090	-0.955	-8.679	2.026
Net income growth	0.654	-0.516	-0.987	-28.213	15.024
Eps growth	0.647	-0.513	-0.989	-33	15.031

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Source: Financial Modelling Prep

Data

Consider that 2022 has been the most decisive year for Ford over the last five years. Many companies have shown negative returns for both simple moving average periods of 50 days and 200 days. Compared to other companies, which have shown much steeper negatives, this could be a year of a potential turnaround for Ford Motor Company.

Metric	Values
SMA20	9.12%
SMA50	8.42%
SMA200	-1.77%

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Source: FinViz

Enterprise

As Ford has had flat revenue and profit growth, the stock price shows otherwise, with a solid return for the last year. Also, market capitalization has almost doubled from 2020 to 2021.

Metric	2017	2018	2019	2020	2021
Symbol	F	F	F	F	F
Stock price	11.060	8.710	8.840	10.530	19.540
Number of shares	3.980 B	3.954 B	3.972 B	3.973 B	3.991 B
Market capitalization	44.020 B	34.437 B	35.112 B	41.836 B	77.984 B

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Source: Financial Modelling Prep

Estimate

If 2021 proved to be a much stronger year than prior years, 2022 has been a relatively more robust year than other large blue-chip companies can say. The critical factor will be if Ford Motor Company’s forward guidance will sustain this momentum. Looking at 2023 and beyond, the forecasted revenue could be more substantial but should still be considered a winner for long-term holders. In addition, the EBITDA could be more convincing, which is decent enough to show some performance over the next few years. I recommend that investors look for stronger performers, as the car market may be super-sensitive if an upcoming recession turns into a long-term economic downturn.

YEARLY ESTIMATES	2022	2023	2024	2025	2026
Revenue	155,862	161,408	166,093	170,845	–
Dividend	–	–	0.58	0.60	0.60
Dividend Yield (in %)	3.77 %	4.39 %	4.02 %	4.15 %	4.15 %
EPS	1.98	1.76	1.82	1.87	1.30
P/E Rati	7.29	8.22	7.96	7.75	11.12
EBIT	11,315	10,383	10,714	10,857	8,085
EBITDA	15,728	15,395	16,871	16,373	–
Net Profit	7,944	7,271	7,592	7,586	5,293

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Source: Business Insider.

Does Technical Analysis Show It is Time to Order Ford Stock?

Fibonacci

As one can see with the red trendline, Ford has roughly another 50% move to full recover from its stock price historical high from last year. So, it is conceivable there will be growth in the stock price of Ford, but do not expect high momentum growth.

Bollinger Bonds

It could be a positive indicator of how Ford’s stock price continues to breach Bollinger’s upper band potentially. However, I would not consider this strong outperformance relative to significant stock indices or automaker competition.

MACD

As said, there are some encouraging signs of how Ford has managed its negative downside. It is also encouraging to know that market entry potential exists, as the stock price has broken through the zero line of the lower panel in this chart.

RSI

One does need to worry when one sees a stock price cross above the upper overbought relative strength indicator condition. Historically you need to compare to previous events of this to see if there is a possible pullback on the stock price. Based on Ford’s flat growth fundamental history, there might not be much impact negatively on the stock price. However, there is a need for price velocity to slow down to maintain momentum.

Prediction via Artificial Intelligence

Monte Carlo

Monte Carlo simulations always show the relative strength of expected stock price comparing many forecasted predicted paths. In this case for Ford, there is quite a high magnitude of stock price expectation to recover its historical peak over the short term.

The same could be said for normalized distribution, as there seem to be higher odds of stock price rising in the coming weeks. It can add to the narrative of potential stock price upswings.

Regression

As shown in this 30-day red regression line forecasted based on historical price action, Ford will likely have a suppressed stock price increase which seems more realistic based on flatter fundamentals.

Risks Indicate Not Optimal Time for Ford Market Entries

Price vs. Short Volume

One solid, encouraging sign for Ford is how the stock price goes up while trading volume on the shorting side drops. As a result, investors can raise their confidence in future car models to be released or more robust market conditions.

Source: StockGrid.

Sustainability

Considering Ford is an automotive manufacturer that negatively impacts the environment, you would expect Ford to have an outperforming rating. But instead, they are only set at average, meaning there is work to do to become more environmentally friendly.

Metric	Value
Social score	11.34
Peer count	37
Governance score	9.35
Total esg	29.95
Highest controversy	3
ESG performance	AVG_PERF
Percentile	63.41
Peer group	Automobiles
Small arms	False
Environment score	9.27

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Source: Yahoo Finance.

Price Targets

Market analysts were setting high, unrealistic targets that Ford could not meet with its stock price. Does this mean that Ford promised strong guidance?

Source: Business Insider.

Recommendation

Looking at what other market analysts believe, with sell ratings over the last month, I would agree with Ford being more of a hold for now, but eventually watch to see if you want to add exposure of Ford to your portfolio.

Interval	RECOMMENDATION	BUY	SELL	NEUTRAL
One month	SELL	1	15	10
One week	SELL	2	14	10
One day	NEUTRAL	7	10	9

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Source: Trading View.

Conclusion

As shown for Ford’s stock price, forward guidance estimates seem strong but could be a concern if recessionary conditions come to fruition. Based on current market technical indicator conditions and higher predicted stock prices using artificial intelligence, we have confidence that Ford Motor Company, at some point, will become a turnaround story. The stock price might become more reasonable as compared to higher-performing stock prices. I recommend a hold status on Ford stock to be placed on a watch list for this to turn around.