Will Strong F-Series Sales Power Ford’s Q2 Results?

Ford is anticipated to publish its Q2 2023 outcomes on July 27, reporting on 1 / 4 that noticed deliveries proceed to broaden. We count on Ford’s revenues for the quarter to come back in at about $40.30 billion, marking a 6% improve versus final yr and marginally forward of consensus estimates. We count on earnings to face at $0.54 per share, consistent with consensus estimates. See our evaluation of Ford’s Incomes Preview for a better have a look at what to anticipate when the corporate publishes Q2 outcomes.

Though the macro image is wanting a bit more difficult for the automotive trade at giant, resulting from excessive rates of interest and issues a couple of U.S. recession, Ford truly reported strong supply numbers for Q2. Complete car gross sales within the U.S. rose by 10% year-over-year to about 531,600 items in Q2, pushed primarily by surging gross sales of vans. Led by the F-Sequence model, truck gross sales had been up by roughly 26% year-over-year, though each the SUV and sedan gross sales had been down. Whereas Ford beforehand guided that costs for autos would decline by about 5% in 2023, resulting from some discounting after over a yr of serious worth will increase, we count on the influence of this to be offset by a extra favorable gross sales combine on condition that vans usually have greater common promoting costs. We additionally count on margins to see some enchancment pushed by the upper volumes, cooling commodity worth inflation, and better gross sales of pick-up vans. Over Q1 2023, adjusted working margins had been up by 140 foundation factors to eight.1% and we might see an identical improve in Q2 as nicely.

Whereas Ford inventory might transfer greater if it beats earnings, we predict the inventory stays undervalued. Ford inventory is buying and selling at below 8x 2023 consensus earnings. We worth Ford inventory at about $18 per share, which is 29% forward of the present market worth. See our evaluation on Ford Valuation: Costly Or Low cost for extra particulars on what’s driving our worth estimate for Ford. For extra info on Ford’s enterprise mannequin and income developments, take a look at our dashboard on Ford Income: How Ford Makes Cash.

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