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World NewsFord beats Tesla to become auto industry's top growth stock in 2021

Ford beats Tesla to become auto industry’s top growth stock in 2021

The all-electric Ford F-150 Lightning truck throughout an augmented actuality presentation on the Motor Bella Auto Show in Pontiac, Michigan, on Tuesday, Sept. 21, 2021.

Emily Elconin | Bloomberg | Getty Images

DETROIT – Shares of Ford Motor soared by roughly 140% final 12 months, beating Tesla, its bigger crosstown rival General Motors and a bunch of electrical car start-ups to become the perfect performing stock amongst automakers in 2021.

Investors have rewarded the brand new course beneath auto veteran Jim Farley, who took the helm in October 2020 after the Ford board ousted trade outsider Jim Hackett.

Farley promised to be extra open and direct with traders. He additionally launched the Ford+ restructuring plan, which shifts extra assets to construct electrical autos just like the upcoming F-150 Lightning pickup.

“We’re executing our plan and we’ll continue to do that so every business in our portfolio has a sustainable future. If not, we will restructure it,” he mentioned in a January 2021 interview.

Morgan Stanley analyst Adam Jonas mentioned it was “truly a breakthrough year for Ford … easily the most important year strategically for the company since the financial crisis.”

Ford’s largest single-day share enhance got here on Dec. 10 when Farley confirmed on Twitter that it could triple manufacturing of the electrical Mustang Mach-E to greater than 200,000 items per 12 months for North America and Europe by 2023. He advised CNBC the day earlier than that the corporate halted reservations of the F-150 Lightning after they hit 200,000 items.

Shares that day jumped 9.6% to a roughly 20-year excessive of $21.45 a share.

The subsequent greatest day for traders got here on Oct. 28 after the automaker delivered its third-quarter earnings, elevating its yearly steerage and saying EPS that doubled analysts’ estimates. Shares rose by 8.7%.

Other massive days included a 8.5% bounce on May 26 throughout the automaker’s investor day, with particulars of the Ford+ turnaround plan, and a 8.4% achieve on Jan. 20 after Deutsche Bank added a short-term purchase on the stock forward of its annual earnings report.

Since Farley took the helm greater than 15 months in the past, the stock is up by greater than 200%. The runup will proceed if the corporate is in a position to ship on Ford+ plan initiatives that included accelerating EV plans, observers say, and obtain an 8% adjusted revenue margin earlier than curiosity and taxes by 2023.

Ford is rated obese with a worth goal of $20.25 a share and a long-term growth charge of 67.8%, in accordance to a mean of twenty-two analysts compiled by FactSet. Shares closed final 12 months at $20.77, up by 136.3% in 2021.  

Ford, at a market cap of $83 billion, nonetheless has an extended highway forward of it to get its market worth up to most of its established opponents in addition to EV start-up Rivian.

Here’s how different legacy automakers, in addition to top rising EV start-ups, did final 12 months and what analysts anticipate from them in 2022, in accordance to common analysts compiled by FactSet.

Tesla (TSLA): $1,056.78, up 49.8%

  • Rating/goal: Hold/$878
  • Market cap: $1.1 trillion

Lucid (LCID, since July 26): $38.05, up 41.8%

  • Rating/goal: Overweight/$44.33
  • Market cap: $62.6 billion

Volkswagen (VWAGY): $29.39, up 41.2%

  • Rating/goal: Overweight/$28.77
  • Market cap: $127.9 billion

General Motors (GM): $58.63, up 40.8%

  • Rating/goal: Buy/$74.45
  • Market cap: $85.1 billion

Toyota (TM): $185.30, up 19.9%

  • Rating/goal: Overweight/$211.59
  • Market cap: $253.2 billion

Ferrari (RACE): $258.82, up 12.8%

  • Rating/goal: Hold/$258.40
  • Market cap: $47.6 billion

Stellantis (STLA): $18.76, up 10%

  • Rating/goal: Buy/$26.51
  • Market cap: $59.2 billion

Fisker (FSR): $15.73, up 7.4%

  • Rating/goal: Overweight/$25.50
  • Market cap: $4.7 billion

Rivian (RIVN, since Nov. 10): $103.69, up 2.9%

  • Rating/goal: Overweight/$133.92
  • Market cap: $93.4 billion

Nio (NIO): $31.68, down 35%

  • Rating/goal: Buy/$59.18
  • Market cap: $52.1 billion

Nikola (NKLA): $9.87, down 35.3%

  • Rating/goal: Hold/$15.29
  • Market cap: $4 billion

Lordstown Motors (RIDE): $3.45, down 82.8%

  • Rating/goal: Underweight/$4.60
  • Market cap: $663.2 million

– CNBC’s Michael Bloom contributed to this report.

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