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Ford Stock Jumps On Credit Suisse Upgrade, Price Target Boost Ahead of Q3 Earnings

Credit Suisse analyst Dan Levy sees both Ford and GM beating Q3 earnings forecasts and boosting near-term profit guidance as the industry works its way out of the global semiconductor shortage.

Ford Motor  (F) - Get Ford Motor Company Report shares powered higher Wednesday after analysts at Credit Suisse boosted their rating and price target on the carmaker heading into next week's third quarter earnings report. 

Credit Suisse analyst Dan Levy raised his outlook on Ford to 'outperform', from 'neutral', and lifted his price target on the stock by $5, to $20 a share, citing a favorable industry cycle heading into 2023, matching by inventory rebuilding and better positioning of the carmaker in the burgeoning electric vehicle market. 

As a result, Levy is expecting both Ford and its larger rival, General Motors  (GM) - Get General Motors Company (GM) Report, to beat Street earnings forecasts next week while raising their near-term profit guidance heading into the final months of the year and beyond. 

"We’ve  seen two lines of thought emerge on auto stocks. The more tempered view is that with the  ongoing semi shortage limiting upside on ’22, there is little need to be in auto stocks now," Levy said. "However, we take a more constructive view on auto stocks - with the worst likely passed on the semi shortage, and with historically low inventory implying inventory rebuild will likely last well into 2023, we see a positive trajectory ahead for auto stocks."

Ford shares closed 4% higher on the session at $16.04 each, a move that extends the stock's year-to-date gain to around 88.3%.

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Ford will publish its third quarter earnings after the close of trading on Wednesday October 27, with analysts looking for an adjusted bottom line of 27 cents per share on revenues of $32.656 billion. GM will report prior to the start of trading next Wednesday.

The group's overall U.S. vehicle sales were down 17.7% from last year at 156,614 units over the month of September, Ford said last month, while truck sales, Ford said, fell 22.6% 83,554 units.

Sales of its electrified cars, however, were up 91.6% from last year at 9,150 and and reservations for the new F-150 Lightning have topped 150,000.

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Ford also managed to boost its overall inventory by 21,000 vehicles over the month, despite plant closures and delays linked to the global shortage in semiconductors, to reach a gross stock total of 236,000 units.