Proactive Investors - Analysts at the Bank of America (NYSE:BAC) remain positive on Ford Motor Company (NYSE:NYSE:F) after the automaker’s second quarter earnings disappointed and sparked a sell-off of the stock.
Shares of Ford were down 18% at $11 on Thursday afternoon.
Ford posted earnings per share of $0.47, below the analysts’ forecast of $0.70 and adjusted earnings before interest and taxes (EBIT) of $2.8 billion was $1 billion below their estimate of $3.8 billion.
The BofA analysts highlighted that the operating miss stemmed from disappointing Ford Blue results, hit by higher warranty expenses, launch costs, and other small items.
This was partially offset by Ford Pro which “continued to shine” during Q2.
They added that, despite the miss, management painted a positive picture for Ford’s recent progress.
“Management called out Ford's portfolio strength in its core truck market, especially in Pro, which is Core of the company and a priority for capital allocation. This is best illustrated by the recent announcement of incremental Super Duty capacity in Canada,” the analysts wrote in a note to clients.
“On the top of the Core business, management emphasized potential growth opportunities in software and services, which have early traction.
“Interestingly, Ford highlighted that EVs are necessary to comply with regulations near-term and a market reality long-term, therefore the investments in EVs will continue.”
Strong near-term product cadence combined with management’s focus have the bank’s analysts expecting strong profits and progress.
They repeated their ‘Buy’ rating but lowered their price target from $22 to $20 as they slightly reduced their estimates post-earnings.