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) -- Following the 13% drop in


(F) - Get Ford Motor Company Report

stock Friday, some analysts are dialing back estimates but retaining buy recommendations.

In a report issued Sunday, Goldman Sachs analyst Patrick Archambault reduced his six-month price target to $20 from $22, with a buy rating. At midday Monday, shares were not recovering, but rather were trading down 14 cents to $16.13.

Archambault reduced his full-year 2011 and 2012 estimates to $1.77 and $2.03, respectively. Analysts surveyed by Thomson Reuters are estimating $2.17 and $2.06.

"Our new estimates reflect higher and more back-end loaded fixed costs than we previously modeled," Archambault wrote. He now allocates fixed cost inflation of $2.6 billion during the current year, up from $1.5 billion, driven by higher product development and manufacturing costs as Ford increases its headcount, as well as by higher commodity costs.

Over the long term, he noted, "we see these outlays as essential to extending Ford's product leadership."

Bank of America Merrill Lynch analyst John Murphy also reduced his price target to $22 and reduced estimates while retaining a buy rating. Murphy's 2011 and 2012 targets, respectively, are $2.18 and $2.05. But he noted: "We remain encouraged by Ford's solid progress in 2010 and expect 2011 to be even better."

"Ford's cash generation of $1billion (in the fourth quarter) was ahead of expectations, and will likely continue to be robust," Murphy wrote. "Our current estimates imply that the company will be net cash of more than $13 billion in 2011, and as a result shareholders will reap much greater benefits than generally perceived, in our view."

In reviewing what happened on Friday, it seems clear that expectations were excessive after Ford had beaten estimates seven straight times starting in the first quarter of 2009. This time, Ford earned 30 cents a share excluding items, below consensus of 48 cents. On the earnings call, top executives acknowledged that their

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guidance could have been better.

Ford executives had

warned repeatedly of rising commodity costs, but not of enhanced product development costs or of a fourth-quarter loss in Europe.

Meanwhile, Standard & Poor's analyst Efraim Levy retains a hold on Ford shares.

So what does this mean for


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? "We think expectations for GM's fourth quarter are quite different following explicit warnings by management that the quarter would be weak" relative to the third quarter, Archambault said.

On Friday, GM shares closed down 4% from the previous close at $36.60. At midday Monday, shares were nearly unchanged at $36.46.

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

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