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Why Ford (F) Is Down Today

Stocks in this article: F

NEW YORK (TheStreet) -- Ford  (F) continued to feel the effects of its steep January sales declines as the U.S. automaker was falling 1.21% to $14.69 on Wednesday afternoon.

The company's sales declined 7.5% in the month of January, while analysts had expected only a 2.3% decrease. A number of Ford brand vehicles declined year over year, particularly the Focus, which fell 26%. The Fusion declined 8% and the F-series pickup, the company's best seller, stayed flat at 46,536 sales.

Reports also surfaced on Wednesday that Ford would stop production at its Romanian car factory for four days because of low demand. Ford took over operations of local automaker Automobile Craiova, which had been struggling, in 2008 and started to produce its B-Max model there in 2012. The operation produced more than 68,000 automobiles and more than 250,000 engines in Romania in 2013, but production has stopped for multiple days in each month since September.

The factory, which employs about 4,000 people, will close its car division on Fridays for the rest of February.

Must Read: Why Ford Was Down Monday

TheStreet Ratings team rates FORD MOTOR CO 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 a few notable 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, compelling growth in net income, increase in stock price during the past year and impressive record of earnings per share growth. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • The revenue growth came in higher than the industry average of 14.1%. Since the same quarter one year prior, revenues slightly increased by 3.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 90.2% when compared to the same quarter one year prior, rising from $1,598.00 million to $3,039.00 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • FORD MOTOR CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FORD MOTOR CO increased its bottom line by earning $1.75 versus $1.42 in the prior year. For the next year, the market is expecting a contraction of 20.2% in earnings ($1.40 versus $1.75).
  • You can view the full analysis from the report here: F Ratings Report

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