Possible stock decline for Ford on July 30th, mirroring General Motors' trend?
In the automotive industry, the second quarter of 2025 has been a turbulent period for many companies, and Ford is no exception. The American automaker is grappling with a series of issues, including a significant recall of around 700,000 vehicles due to a fuel injector issue, which is estimated to cost approximately $570 million.
Despite these challenges, Ford is set to release its Q2 earnings on July 30, providing more clarity on the recurring recall issue, the company's EV strategy, and the impact from the new regulations. The earnings call will be an important milestone for Ford, as it navigates through these tough times.
The Q2 earnings report will also shed light on the financial impact of tariffs, a topic that has been a major concern for the Detroit automakers. While specific figures for Ford's tariff-related costs were not available, the Detroit Three automakers are estimated to face an combined cost of $42 billion in 2025 due to tariffs and retaliations.
In the face of these challenges, Ford's F-series trucks have managed to perform well, recording their best second-quarter performance since 2019. The company also experienced a 14.2% quarterly rise in U.S. deliveries, which was around 10 times the 1.4% industry-wide sales increase.
However, Ford's Q2 earnings are expected to fall 2% year-over-year to $43.9 billion, and the company is anticipated to report earnings per share (EPS) of $0.34, representing a year-over-year fall of 27.7%.
Ford's electric vehicle sales have slowed down, and the company expects a pre-tax loss between $5 billion and $5.5 billion this year in the EV business. This is a significant setback for the company, which has been investing heavily in its electric vehicle strategy.
The Jim Farley-led company has a lot to sort out, particularly the frustrating recalls and the related costs. The author of this article remains invested in Ford but finds the current risk-reward profile unattractive due to tariff uncertainty.
Despite the challenges, Ford's stock price trades above its mean target price of $10.18, with the Street-high target price of $14 being 25% higher than the July 22 closing price. Sell-side analysts are not very bullish on Ford, with only three analysts rating it as a "Strong Buy" and 16 analysts rating it as a "Hold."
In conclusion, the 2025 U.S. auto tariffs have led to increased costs, suppressed profits, and ongoing strategic shifts among the Detroit automakers. Ford, like its peers, is navigating through these difficult times, with the Q2 earnings report offering a glimpse into the company's performance and future plans. The author believes that much of the damage has already been done to Ford's stock, and a post-earnings selloff similar to General Motors' may not occur due to strong U.S. sales in the second quarter.
In the realm of both general-news and business, theQ2 earnings report from Ford, scheduled for July 30, will provide insights into the company's EV strategy, recurring recall issue, and the impact from new regulations, as well as the financial impact of tariffs. Technology plays a crucial role in Ford's approach to electric vehicles, as the company has been heavily investing in this area, but recent setbacks, such as slowing electric vehicle sales, have led to significant pre-tax losses. Despite these challenges, Ford's stock price surpasses its mean target price, indicating a mixed outlook among sell-side analysts, with only a few rating it as a "Strong Buy."
