Ford Motor Co Stock Downgraded (F)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Ford Motor (NYSE:F) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and weak operating cash flow.

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Highlights from the ratings report include:

• Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
• FORD MOTOR CO reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, FORD MOTOR CO increased its bottom line by earning $5.01 versus $1.59 in the prior year. For the next year, the market is expecting a contraction of 73.0% in earnings ($1.35 versus $5.01).
• The debt-to-equity ratio is very high at 5.34 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company.
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed compared to the Automobiles industry average, but is greater than that of the S&P 500. The net income has decreased by 1.1% when compared to the same quarter one year ago, dropping from $1,649.00 million to $1,631.00 million.

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Ford Motor Company engages in the development, manufacture, distribution, and service of vehicles and related parts worldwide. The company operates through two sectors, Automotive and Financial Services. The automotive sector offers vehicles primarily under the Ford and Lincoln brand names. The company has a P/E ratio of 2.4, below the S&P 500 P/E ratio of 17.7. Ford has a market cap of $39.29 billion and is part of the consumer goods sector and automotive industry. Shares are down 2.4% year to date as of the close of trading on Tuesday.

You can view the full Ford Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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