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Ford Delays Launch of New Bronco to Summer From Spring

Ford delays the launch of its new Bronco SUV to the summer due to supplier disruptions caused by the coronavirus.
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Ford Motor  (F) - Get Free Report shares slipped Monday after the automaker said it would delay the launch of its new Bronco SUV to summer from spring, due to supplier disruptions caused by the coronavirus.

The pandemic has delayed suppliers’ tooling development work at their facilities, the Dearborn, Mich., company said in a statement. 

It had planned to start accepting reservations for the Bronco today but has now pushed that date to mid-January.

Ford shares recently traded at $9.31, down 0.3%. The stock had firmed 0.4% year to date through Friday, having jumped 43% since Sept. 25.

Morningstar analyst David Whiston raised his fair-value estimate for the stock to $13 from $8, after the company in October reported third-quarter earnings.

“Our new fair value takes into account a stronger 2020 than previously modeled, less debt, a 20-basis-point reduction in our weighted average cost of capital due to a change in our model’s cost of debt, the time value of money, and an increase in our midcycle automotive [earnings before interest and taxes] margin excluding equity income to 4.5% from 4%,” he wrote.

“The latter change is due to our optimism around new Chief Executive Jim Farley longer term being able to execute on cutting warranty costs and reducing vehicle design complexity to bring more scale.”

Further, “as long as covid-19 does not shut down the U.S. economy for a long time like in the spring, we think Ford can have a strong 2021 even with parts of the U.S. economy not in great shape. Key to 2021 will be continued cost-reduction measures and good volume growth from key launches,” Whiston said.

“The new generation F-150 is already in production in Michigan and will start soon in Kansas City, the all-electric Mustang Mach-E is guided to be profitable, and three Bronco models are coming.”