Key Takeaways:
Ford Motor Co. shares fell 5% Wednesday, the stock’s largest single-day decline since April 30, after the automaker reported a sharp drop in April US sales and received a price target cut from Citi.
The reversal followed a multi-day rally for the stock, which had surged after Morgan Stanley turned bullish on the company's energy storage business.
The sell-off was fueled by data showing Ford's US sales for April fell 14.4% year-over-year to 178,667 vehicles. Sales of electrified vehicles dropped 31.1%, with pure EV sales down 24.8% and hybrids declining 32.5%. Even the company's flagship F-Series pickup line saw sales slip 14.7%, according to company data.
The weak sales report puts a spotlight on the challenges facing automakers, as higher borrowing costs and sustained high oil prices pressure consumer demand. The data overshadowed recent optimism surrounding Ford's partnership with Chinese battery giant Contemporary Amperex Technology Co., Limited (CATL), which had previously sent shares higher.
The sharp pullback in Ford’s stock highlights investor concerns over the near-term demand for new vehicles, especially in the higher-priced EV segment. While some analysts see long-term potential in Ford's energy and battery divisions, the immediate reality of slowing sales and margin pressure appears to be taking precedence.
On May 4, before the sales data was released, Citi analyst Itay Michaeli had already cut the firm's price recommendation on Ford to $13 from $13.50, reiterating a Neutral rating.
This article is for informational purposes only and does not constitute investment advice.
