How long will Ford suffer from inflation? Jefferies cuts stock price target

Key points:

  • Automaker investors could be in for a slippery year ahead
  • Jefferies cut Ford’s price target from $20 to $18, citing a broader inflation thesis
  • Operational production could fall by 15 to 30% at car manufacturers

Inflation seems to be the only stability in a world of tumultuous uncertainty. As investors abandon high-growth tech stocks for more stable, low-risk alternatives, Covid variants are wreaking havoc on supply chain logistics and inflation continues to weigh on the industry in the sense large ; it is difficult to analyze the potential benefits.

This story is no more appropriate than for the automotive industry. We’ve seen many companies, from electric vehicles to ICEs, all reporting production issues due to inflationary pressure. Last month, Rivian reversed its decision to fight inflation by raising the selling price of its pre-order vehicles. Similarly, Tesla announced today that it will increase the cost of its vehicles due to inflation.

Also Read: The Best EV Stocks to Buy Right Now

Ford (NYSE: F) is arguably one of the companies best positioned to move forward. Embarking on a strong journey into electric vehicles while maintaining a pipeline of traditional vehicles, the Ford F-150 Lightning propelled Ford into the high end of the electric vehicle market, generating widespread interest across the United States . However, it’s time to look at Ford through an inflationary lens. Ford’s long-term status remains firm, but the company could well suffer over the next year, with potential production cuts, rising costs and supply constraints.

Jefferies analyst Philippe Houchois makes a similar sentiment, lowering Ford’s price target today to $18 from $20. The opportunity comes in the form of a general change for the company, taking into account the reality of a “stagflationary environment” based on rising input costs and supply problems that affect the entire Marlet. Houchois estimates that operating figures could drop by up to 30% for automakers; how will this affect Ford’s bold electric vehicle master plan?

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