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Ford Stock Feels the Love

Ford shares retain their momentum even after gaining 335% in 2009.
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(F) - Get Ford Motor Company Report

love fest continued Thursday.

The automaker reported that European sales rose 16.1% in March, making it the continent's No. 1 auto company for the month, with market share at a 12-year high of 10.4%. Meanwhile, two analysts forecast a first quarter earnings beat (one also raised estimates).

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Not surprisingly, Ford stock was up Thursday, with a mid-afternoon gain of 47 cents to $13.82. Following a 335% gain in 2009, it might have seemed that this train had left the station. But so far in 2010, shares are up about 36%.

Analyst Steven Dyer of Craig Hallum in Minneapolis raised his estimates, citing "continued strong wholesale used-vehicle pricing, which we believe should continue to drive better-than-expected profitability from the company's finance business." Dyer said vehicles coming off lease are fetching higher prices at auction, due to the improving economy and a tight-used vehicle market.

Ford Credit reported a $710 million fourth quarter profit, Dyer noted, and wholesale used-vehicle prices have increased about 3% since then. As a result of that trend and better automotive margins since the Volvo sale, he boosted his full-year 2010 earnings estimate to $1.02 from 83 cents, while bumping his 2011 revenue estimate to $140.2 billion from $135.5 billion, due to market share gains. He raised his target price to $16 from $14.

Ford will report first quarter results in late April. Analysts surveyed by Thomson Reuters are estimating earnings of 30 cents a share, compared with a loss of 75 cents in the same quarter a year earlier. For the full year, analysts are estimating $1.02 a share on revenue of $131.2 billion. Consensus on 2011 revenue is $140.7 billion.

UBS analyst Colin Langan on Thursday forecast a first quarter beat, with earnings at 37 cents a share, a result of higher income in North America. He said the first quarter is a time when Ford historically produces earnings surprises. "Over the last decade, Ford has beaten Q1 consensus expectations 90% of the time," he said. Langan has a buy rating and a $15 price target.

-- Written by Ted Reed in Charlotte, N.C.