May 26, 2022
Wall Street doesn’t always get it right.
It’s always good practice to take analyst opinions with a (large) grain of salt. That said, Wall Street upgrades and newly issued price targets can often be useful sources of buy ideas.
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Remember: what matters most is the thesis behind the rating.
Let’s look at a particularly bold call from investment firm Tigress Financial.
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The bull call
In a recent note to investors, Tigress reiterated their ‘buy’ rating on auto giant Ford and planted a new price target on the stock of $22. That target represents upside of about 70% from Ford’s current levels.
Ford shares have plummeted in 2022 on investor fears over the entire sector, but Tigress sees the stock bouncing back in relatively short order.
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The bull case
Tigress likes Ford’s combination of stability (from its gas-powered vehicles) and growth (from its aggressive switch to electric vehicles).
“Ford will continue to benefit from its leading position in full-size pickup trucks and SUVs, the ongoing execution of its long-term EV production and battery technology development plans, and the successful acceleration of the introduction and production of several new EV models,” Tigress CIO Ivan Feinseth wrote last week.
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Feinseth noted that Ford’s recent launch of the F-150 Lightning — already sold out of its 2022 production run — puts the company ahead of its rivals in the EV pickup market.
“The recent pullback in price also creates a compelling entry point and value as it begins its ongoing ramp-up of EV production following the recently announced production transformation, forming two distinct manufacturing business units highlighting EV production success and unlocking value.”
Buy-and-hold, too?
Tigress also noted that demand for Ford’s gas-powered trucks and SUVs remains strong all while its scales up its EV production, giving investors attractive short- and long-term upside.
“Ford’s ongoing rollout of new products along with international expansion and consistent long-term history of returning cash to shareholders will drive greater long-term shareholder value creation.”
Ford currently offers a dividend yield of 3.2%.
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Brian is an editor for Moneywise. A long-time stock junkie, his work has appeared in The Motley Fool, Seeking Alpha, and Yahoo Finance. He believes in owning "Forever Stocks" — a rare group of businesses that have paid out dividends for decades. Brian holds the Chartered Financial Analyst (CFA) designation.
