Ford ‘pulls a GM’ with its bet on electric vehicles, and Wall Street applauds

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Shares of Ford Motor Co. rose on Friday, and Wall Street bypassed a nearly $ 3 billion quarterly loss and a loss in sales to focus on the automaker’s plans to invest more in electric and autonomous cars. Ford F + 1.23% Thursday night reported a broader loss in the fourth quarter and quarterly sales that were below Wall Street expectations, but revealed a brighter outlook for the first quarter and said it would nearly double its investments in electric and autonomous vehicles.

“We are very encouraged” by these, Deutsche Bank’s Emmanuel Rosner said in his note on Friday. The company’s operating performance in the second half of 2020 and the guidance for 2021 “suggest that the company may be turning its profitability and cash generation around, benefiting from new and refurbished products, strong pricing and mix, and reductions. and global cost efficiencies, “he said. Ford’s plan to invest in electric vehicles and autonomous cars rose to $ 29 billion, including $ 22 billion for electric vehicles through 2025. That shows CEO Jim Farley” is really accelerating the company’s transformation to an electrified and connected future. “Read: Electric Vehicles Will Make Up a Larger Portion of US Retail Car Sales, Edmunds Says Ford is Taking” More Bold and Decisive Steps in EV (and AV), “said Joseph Spak of RBC Capital in his note. Ford” is ‘pulling a GM’ and increasing investment. This is absolutely necessary. ” Ford’s valuation of around $ 45 billion has been dwarfed by Tesla Inc.’s TSLA, + 0.26% $ 800 billion, and General Motors Co.’s GM, + 0.52% $ 79 billion. Tesla, of course, only makes electric vehicles, and GM has pledged to do the same by 2035 and become a carbon-neutral company by 2040. However, a unifying concern with Ford was the news that production of the new F-150 pickup truck The truck, the number one vehicle sold in the US for decades and one of the company’s crown jewels, was hampered by a shortage of chips. The company has temporarily reduced factory shifts. Ford was guided for a 2021 adjusted earnings before interest and taxes of about $ 7.1 billion and $ 8.1 billion, which was “decent” considering the chip shortage, Morgan Stanley’s Adam Jonas said in a note. Ford shares have gained 40% in the last 12 months, compared to gains of around 17% for the S&P 500 Index. SPX, + 0.39%