Why is Ford so Cheap?

The end of the chip shortage is in sight.

Andrew Willis 29 July, 2022 | 4:48AM
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Andrew Willis: Not to be a downer on Ford (F)’s great sales figures recently, but it’s worth keeping in mind that these numbers are relative to a weak 2021, where the company was hit – more so than peers – by a shortage in microchips that persists today.

We expect a full recovery from the chip shortage as early as next year, however, with improved supply in the coming months. Sector strategist David Whiston does see some headwinds with restructuring and rising commodity prices, which could also be keeping investors on the sidelines.

Ford’s switch to electric vehicles is indeed going to take years to bear fruit, but that could look like 2 million EVs sold a year by 2026. We also like the focus on light-truck models which are best-sellers. Lastly, for those concerned the company may lose market share, consider that 75% of Ford Lightning reservations in June were from owners of rival brands.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Ford Motor Co11.02 USD1.80Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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