Ford Motor (NYSE:F) shares fell below $10. The broader market has been optimistic today, however Ford has failed to get in on the rally due to lingering tariff fears. But now that Wall Street looks slightly optimistic on tariffs due to ongoing negotiations with “more than 70 countries,” should you buy Ford stock below $10 before a potential recovery? Let’s look at the background here first.
Ford has declined below $10 due to tariff fears.
Market fears regarding tariffs are starting to cool with negotiations.
Could an improvement in tariff-related sentiment translate into a rally for F stock?
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Ford stock has been a laggard for over three years. It spiked and peaked in early 2022 and has been sliding since. Tariffs have made things even worse for this company. You may think that Ford has a lot to gain from tariffs as it is seen by many as a linchpin of American auto manufacturing, but that’s not entirely the case either.
A big portion of Ford’s car parts are sourced from abroad. It depends on the model and how much, but a good rule of thumb is that “most” of the parts Ford uses are coming mainly from Mexico, Canada, and China. These car parts are not subject to tariffs yet and don’t stack with reciprocal tariffs, but Ford will have to pay 25% on the car parts it is importing effective May 3.
If tariffs stick around until then, input costs are going to rise significantly on the cars Ford assembles in the U.S. The company will either have to take a sales hit through higher prices or take a margin hit. With a 3.18% net margin, there’s little chance it will choose the latter. Sales growth has already been sluggish, so it’s a lose-lose situation and hence the stock has continued declining.
The stock looks cheap on paper since it trades around 6 times earnings. That’s historically very low, but you should also keep in mind that it has $160.8 billion of debt on its balance sheet weighing in on that valuation. Not only that, the sales “growth” going forward is not great. The consensus estimates puts 2030 revenue at $164.7 billion. That’s lower than the 2025 consensus revenue for $168.7 billion.
Ford also projects EV losses of up to $5.5 billion this year. Analysts see EPS falling 26.2% to $1.36. In 2023, EPS was above $2.
The consensus analyst price target does show 26% upside potential to $11.4, but your money is better invested elsewhere. The recent tariff spook has opened up dozens of other buying opportunities with much better upside potential, so I do not think F stock is yet a buy under $10.
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