Ford Sales Drop 21% in November

Ford says its Covid-related production shutdown in March to May hampered sales.
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Ford  (F) - Get Report reported Wednesday that sales dropped 21% in November to 149,931 from 189,562 a year ago as this November’s calendar had three less selling days than 2019.

The automaker’s Covid-related production shutdown in March to May also hampered sales, especially for the company’s top-selling F-series truck division, the company said. F-series sales fell 27% to 52,698 last month from 72,407 a year earlier.

As for auto the industry as a whole, U.S. light vehicles registered a seasonally adjusted annualized sales rate of 15.55 million units in November, down 9% from 17.09 million units last November, according to Wards Intelligence.

Ford shares recently traded at $9.20, down 0.38%, and have eased 1% so far this year.

Morningstar analyst David Whiston puts fair value on Ford shares at $13. He raised it from $8 after Ford’s third-quarter earnings report Oct. 29.

“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 mid-cycle automotive EBIT margin excluding equity income to 4.5% from 4%,” Whiston wrote.

“The latter change is due to our optimism around new CEO Jim Farley longer term being able to execute on cutting warranty costs and reducing vehicle design complexity to bring more scale. As long as COVID-19 does not shutdown 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.”

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