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TheStreet Open House

Ford (F) to Reportedly Debut Aluminum Truck at Detroit Auto Show

NEW YORK (TheStreet) -- Ford (F) will reportedly unveil a new aluminum F-Series truck prototype at the Detroit Auto Show in January 2014, according to a report from Bloomberg.

The aluminum truck would be part of the 2015 model year, and will be lighter than the current F-150 truck. The prototype will reportedly get close to 30 miles per gallon of gasoline on the highway, compared to the estimated 23 mpg highway of the most efficient 2014 model F-150. The change would help Ford move closer to new U.S. fuel economy standards that will require an average of 54.5 mpg across each carmaker's fleet by 2025.

The transition to aluminum from steel will pose some complications for Ford, however. Factories may have to shut down for six weeks to switch out the current machinery and robots used to build the trucks for those that can better handle the lightweight metal.

The new aluminum F-Series truck will reportedly come to market sometime in the second half of 2014.

Late afternoon Monday the stock was down 1.8% at $15.14 a share.

TheStreet Ratings team rates Ford as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FORD MOTOR CO (F) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.5%. Since the same quarter one year prior, revenues rose by 11.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • F's share price has surged by 30.43% over the past year, reflecting the market's general trend, despite their weak earnings growth during the last quarter. Regarding the stock's future course, although almost any stock can fall in a broad market decline, F should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $3,840.00 million or 12.05% when compared to the same quarter last year. Despite an increase in cash flow, FORD MOTOR CO's cash flow growth rate is still lower than the industry average growth rate of 31.10%.
  • FORD MOTOR CO's earnings per share declined by 24.4% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, FORD MOTOR CO reported lower earnings of $1.42 versus $5.01 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $1.42).
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Automobiles industry and the overall market, FORD MOTOR CO's return on equity significantly exceeds that of both the industry average and the S&P 500.

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