Ford (F) Stock Rising as Self-Driving Vehicle Plan Advances

NEW YORK (TheStreet) -- Shares of Ford Motor Co. (F) are climbing 1.12% to $15.30 after the company said that it is moving the development of its self-driving cars to its advanced engineering operations from the Palo-Alto research lab, Bloomberg reports.

This move is an important step toward bringing a model to market, said Raj Nair, group VP of global product development.

"For us, autonomous vehicles are about making the technology accessible to everyone, just as Henry Ford did with the automobile a century ago," Nair stated.

The automobile manufacturer did not say when self-driving cars will be on the market but CEO Mark Fields mentioned the auto industry will have a fully autonomous car on the road by 2020, Bloomberg noted.

As automakers are competing to develop self-driving cars, the market for autonomous technology is expected to grow to $42 billion by 2025, with self-driving cars accounting for a quarter of global auto sales by 2035, according to Boston Consulting Group, Bloomberg said.

Separately, TheStreet Ratings team rates FORD MOTOR CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FORD MOTOR CO (F) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its generally strong cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has slightly increased to $2,413.00 million or 8.69% when compared to the same quarter last year. Despite an increase in cash flow, FORD MOTOR CO's cash flow growth rate is still lower than the industry average growth rate of 23.55%.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 6.9%. Since the same quarter one year prior, revenues slightly dropped by 5.5%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • FORD MOTOR CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, FORD MOTOR CO reported lower earnings of $0.78 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($1.59 versus $0.78).
  • The gross profit margin for FORD MOTOR CO is rather low; currently it is at 18.58%. Regardless of F's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.72% trails the industry average.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, FORD MOTOR CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • You can view the full analysis from the report here: F Ratings Report

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