Ford (F) Stock Fell on Weak Auto Dealer Sales

Ford (F) stock declined in late afternoon trading on Friday, after data showed that auto dealership sales declined in October.
By Amanda Albright ,

NEW YORK (TheStreet) -- Ford Motor Co.  (F) - Get Report stock closed down 0.89% to $13.91 on Friday, as retail stocks fell on weak economic data.

Commerce Department released report today that showed October retail sales increased 0.1% from the prior month, compared to analysts' forecasts for a 0.3% increase in retail. 

Auto dealership sales declined 0.5% last month in October, according to the report.

However, automakers reported strong sales in October, Reuters reports. Last week, Ford reported a 13% year over year increase in October sales.

The discrepancy between Friday's data and automakers' sales reports is likely due to dealerships increasing discounts to attract customers, according to Reuters

Separately, 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 some important positives, 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, increase in net income, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

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

  • The revenue growth came in higher than the industry average of 6.0%. Since the same quarter one year prior, revenues slightly increased by 9.2%. 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 128.6% when compared to the same quarter one year prior, rising from $835.00 million to $1,909.00 million.
  • Net operating cash flow has increased to $6,455.00 million or 20.22% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 10.18%.
  • After a year of stock price fluctuations, the net result is that F's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FORD MOTOR CO reported lower earnings of $0.78 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($1.63 versus $0.78).
  • You can view the full analysis from the report here: F

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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