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.
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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.
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.
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“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.
