How Ford Becomes a $84 Stock | Summary and Q&A

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September 21, 2023
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Let's Talk Money! with Joseph Hogue, CFA
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How Ford Becomes a $84 Stock

TL;DR

Despite struggling in recent decades, Ford's stock could experience a significant increase in revenue and reduced costs due to its transition to electric vehicles, potentially leading to a return of 600%.

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Questions & Answers

Q: Why have Ford's shares remained stagnant for the past 40 years?

Ford's stock has struggled due to various factors, including short-lived positive news and production bounces, but the recent UAW strike and labor market tightness have further impacted its growth potential.

Q: How does Tesla's labor cost advantage compare to Ford's?

Tesla pays significantly less in wages and benefits for its non-union labor compared to Ford and other major automakers, giving it a cost advantage.

Q: Can Ford's shift to electric vehicles boost its profitability?

Yes, the transition to EVs, especially with the popular F-150 Lightning, could lead to lower production costs and increased profitability for Ford.

Q: What are the challenges Ford faces in its shift to electric vehicles?

Ford needs to address issues such as battery problems, storage limitations, and the need for price adjustments to make the electric F-150 more appealing to truck owners.

Summary & Key Takeaways

  • Ford's stock has remained stagnant for 40 years, but a potential strike resolution and the shift to electric vehicles could drive strong returns.

  • The United Auto Workers (UAW) strike may result in pay hikes of 20 to 30%, putting Tesla at a disadvantage in terms of labor costs.

  • Ford's transition to EVs, particularly the F-150 Lightning, could lead to increased profitability and market dominance.

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