October 25, 2021

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Business & Finance Information

Wall Road has excessive expectations for Ford’s investor day

Ford CEO Jim Farley speaks with reporters exterior the corporate’s world headquarters on Might 19 in Dearborn, Michigan, following the debut of the electrical F-150 Lightning pickup truck

Michael Wayland / CNBC

DETROIT — Wall Road has excessive expectations for Ford Motor’s first investor day underneath CEO Jim Farley on Wednesday.

The corporate’s inventory value has roughly doubled since Farley took management of the corporate Oct. 1. That features a 12.6% enhance final week after the debut of the corporate’s new electrical F-150 Lightning pickup truck.

Traders shall be watching the extremely anticipated investor occasion to see if Farley can sustain the momentum. He has promised to offer particulars his administration crew’s path for the automaker.

“[It’s] a giant deal. It is my administration crew’s coming-out occasion,” Farley mentioned final week. “Sure, we have had a pair good quarters. That is nice, however actually the large take a look at is what’s our plan for the corporate and the way it may add worth.”

Farley’s predecessor, Jim Hackett, was criticized by Wall Road for failing to element his turnaround plan and having an unclear imaginative and prescient to repair Ford’s operations. Farley’s plan should be detailed to appease Wall Road.

“Since Jim Farley has taken over as CEO, Ford has promised elevated transparency and measurable [key performance indicators] so we will observe Ford’s progress and execution,” RBC Capital Markets analyst Joseph Spak mentioned in a be aware. “We anticipate these, together with monetary targets, to be detailed on the occasion.”

Different expectations vary from a transparent path for the corporate to attain an 8% adjusted revenue margin to new particulars relating to its plans for electrical and autonomous autos. Listed here are extra particulars on these objects and extra.

Monetary targets

Ford CEO Jim Farley at the company’s new Rouge Electric Vehicle Center on May 18, 2021 ahead of remarks from President Joe Biden.

Michael Wayland / CNBC

Before the coronavirus pandemic, Ford’s adjusted profit margin was 4.1% in 2019, followed by 2.2% in 2020. Due to an imbalance of supply and demand in new vehicles due to an ongoing global semiconductor chip shortage, it was inflated to 13.3% during the first quarter of this year.

For comparison, General Motors’ adjusted profit margin was 6.1% in 2019, 7.9% in 2020 and 13.6% during the first quarter of this year.

Wells Fargo analyst Colin Langan expects Ford to reaffirm its long-term margins at the event, and mostly focus on the “future mobility themes” such as electric and autonomous vehicles and data monetization.

Bronco EV?

Ford is launching the 2021 Bronco with more than 200 factory-backed aftermarket accessories for more capability and personalization.

Source: Ford

“Our strategy is very simple. We are not going to electrify every vehicle in every segment. We are going to focus on where we are outstanding,” Farley said earlier this month during the automaker’s annual shareholder meeting. “We’re going to electrify our most iconic vehicles.”

In February, Ford announced plans to increase its investment in electric vehicles to $22 billion through 2025. That included $10.5 billion in new investments and $7 billion it previously spent since 2016.

Analysts also want to know an expected sales target from Ford for EVs. GM has said it plans to sell 1 million EVs annually by 2025 under a $27 billion plan in electric and autonomous vehicles through 2025. That includes launching 30 new EVs globally by then.

Ford last week answered analysts’ questions on whether the automaker would make its own battery cells by announcing plans for a joint venture with South Korean battery maker SK Innovation.


Lidar offers ultra-high resolution perception, providing the photorealistic imaging required to identify small objects for safe operation on complex city streets.


“Our impression is that Argo is making significant progress. A detailed update — including with respect to the go-to-market strategies — could further underscore Ford’s position to capture future installed-base economics,” Citi’s Michaeli said.

Argo is testing its self-driving technology in six U.S. cities using Ford vehicles. The company earlier this month unveiled its own lidar, which many believe is the key technology to commercializing autonomous vehicles.


Many of Farley’s promises have revolved around connectivity and data monetization, including its industry-leading fleet and commercial business.

During the company’s first-quarter earnings call last month, Farley said the company was “only scratching the surface of our customers benefiting from our fully connected vehicles.”

2022 Ford F-150 Lightning


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