Ford stock could reach the $100 price level if the company manages to capture a significant share of the electric vehicle market and ramps up production. Even then, the $100 milestone would be difficult to reach, as the stock is expected to trade nearly three times above its all-time high from the late 1990s.
The Ford Motor Company (NYSE:F) is one of the world’s largest automakers, employing more than 190,000 people worldwide. Ford has recently invested heavily in electric vehicles and has had great success in the market, trailing only Tesla as the most popular electric vehicle manufacturer in the United States.
In this article, we’ll look at the key catalysts that could help fuel a Ford stock rally and the key hurdles that are keeping Ford stock from hitting $100.
Factors That Could Help Ford Stock Hit $100
There are several growth catalysts that could help Ford shares hit the $100 mark. For starters, Ford has been growing its EV market share in recent years, thanks to a revamped product lineup and an increase in the number of units shipped. Additionally, Ford shares historically traded up to +133% above their current price, suggesting that Ford has a lot of potential. That said, let’s look at each of these factors in more detail in the sections that follow.
Increase in electric vehicle (EV) sales
According to Ford Q1 2023 sales release in the United States, Ford saw a massive quarter-over-quarter (QQ) increase in the number of electric vehicles sold. While Ford sold 7,706 vehicles in Q1 2022, the company shipped 10,866 vehicles in Q1 2023, recording +41% growth. The largest relative QoQ increase was recorded by the popular F-150 Lightning electric truck, which saw an increase of more than +1,500% between quarters (from 254 units in Q1 2022 to 4,291 units in Q1 2023).
It should be noted that the entire line of Ford vehicles has experienced considerable growth. Internal combustion engine and electric vehicles have seen tremendous growth. In fact, the only product type that saw a decline in Q1 2023 was hybrid vehicles, which saw a decline of -4.1% (from 28,219 to 27,064).
New product line
Ford has always been known for its line of pickup trucks, led by the iconic F-150. Ford decided to capitalize on the popularity of the F-150 model and created the F-150 Lightning, an electric alternative to the traditional truck. Ford buyers were apparently very pleased with the new F-150, as it sold very well and even cracked the list of the top 10 best-selling electric vehicles in the United States.
By the end of the year, the company is targeting an annual rate of return of 150,000 units for the F-150 Lighting and 210,000 units for the Mustang Mach-E, another electric SUV in Ford’s lineup.
Beyond the F-150 lighting, Ford’s focus on light trucks is more apparent than ever. Of 475,906 vehicles sold in the third quarter of 2023, only 14,022 were cars, with SUVs and trucks accounting for the rest of the units.
Historical Stock Price Trends
As of this writing, Ford is trading at around $15 per share, up more than +27% year-to-date. Although the stock has done well recently, it is trading well off its all-time high of over $35, which it hit in late 1999.
If Ford manages to maintain its strong position in the US market and potentially expand its presence in emerging electric vehicle markets globally, Ford’s stock price could see a massive rally.
Ford’s market capitalization currently stands at $60 billion. At $100 per share, Ford’s market capitalization would be just under $400 billion. Meanwhile, the market capitalization of Ford’s main competitor, Tesla, is $840 billion. Given the number of units produced and plans to further increase vehicle production in the months and years to come, it seems entirely plausible that Ford could hit $100 in the future.
Factors that could keep Ford stock from hitting $100
The main impediments to Ford’s journey to $100 are growing competition in the electric vehicle market, declining sales in China, one of the world’s largest markets, and relatively poor stock market performance. from Ford over the past two decades, which could in part be the result of the above-average dividend yield.
Strong competition in the EV market
Virtually every automaker has devoted a significant amount of resources to building and developing their own electric vehicles in hopes of claiming a share of the electric vehicle market, the most important battleground that will ultimately determine which will be the largest companies in the automotive industry.
Ford has had great success in the electric vehicle space so far, managing to claim second place in the United States in terms of electric vehicles sold, behind Tesla. However, Chinese manufacturers like NIO and BYD, European car players like Volkswagen, BMW and Renault, and Japan-based Toyota and Mitsubishi are all developing their own electric vehicle products and technologies, which could cause Ford to lose a part of its market share. Market share of electric vehicles in the future.
Declining sales in China
While electric vehicles are clearly the future, internal combustion vehicles still account for the majority of vehicle sales – and that will likely remain the same for the foreseeable future. According to a 2021 report of the New York Times, “electric vehicles could account for 25% of new vehicle sales by 2035” and up to 60% by 2050.
Meanwhile, Ford’s traditional vehicle sales in China have fallen over the past two years. After hitting an all-time high of 1.3 million units in 2016, Ford sales have fallen to 600,000 in 2021 and 500,000 in 2022. According to a Ford Motor China spokesperson, the company will respond to lowering sales by reducing costs “in all areas”. the spokesperson.
High dividend yield
Historically speaking, Ford stock has had one of the highest dividend yields among S&P 500 stocks. The dividend yield range has reached 11.6% over the past two years, which is considerably higher than the S&P 500 long-term average return of 1.85%.
High rates of return are usually an indicator of a company’s profitability. However, a very high rate of return can lead to a decline in share price, because a large portion of profits is allocated to rewarding shareholders instead of being invested in R&D, manufacturing facilities and other business elements that could increase long-term profitability at the expense of short-term profits.
Ford stock forecast for 2023-2024
According to a Ford stock prediction algorithm by CoinCodex, the price of Ford stock may experience significant up and down price activity over the next 12 months. Forecasts estimate Ford’s stock price could rise above $21 in September, however, a subsequent drop in prices in October and November could see the stock fall below $13.
On a yearly basis, the price of Ford stock is expected to settle around $10, or around -30% below the stock’s current value. It should be noted that price predictions are just that, forecasts, and they cannot take into account daily fluctuations and market trends, but can only model price movements based on trends. price history.
So, will Ford stock hit $100?
Ford’s stock certainly has the potential to hit $100 in the future, thanks to the company’s impressive sales of electric vehicles and its focus on cutting production costs. However, reaching the $100 price target depends on several factors, such as Ford’s success in claiming greater market share of electric vehicles globally and the recovery of traditional vehicle sales in China. , which are impossible to predict with certainty at this stage.
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