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​​Ford Isn’t Tesla Yet And Shouldn’t Be Trading Like An Electric Vehicle Stock, This Firm Says – Forbes

It’s too early for investors to value and trade legacy automakers such as Ford like electric vehicle stocks, according to Jefferies analysts who recently downgraded shares of the company warning that there is limited upside ahead.
The downgrade comes a day after shares tanked 8%.
Shares of Ford fell 0.5% to nearly $22 per share on Thursday despite a downgrade from Jefferies analysts, who warn the stock may have gotten ahead of itself.
Analyst Phillipe Houchois downgraded Ford from a “buy” to a “hold” rating noting that shares have limited upside left after a hot streak that sent the stock skyrocketing more than 130% in 2021.
Though the company is making solid progress on its electric vehicle ambitions, it’s too early for investors to be trading Ford stock like an EV company, he argues.
The Jefferies analyst is subsequently hesitant to assign a higher valuation multiple to Ford’s stock, pointing out that the company is still susceptible to production issues caused by the pandemic and the shortage in semiconductors.
Ford shares have repeatedly surged past most analysts’ estimates, leaving them to either have to downgrade the stock or adjust price targets: Despite the downgrade, Houchois raised his price target to $25 per share from $20 per share. 
After the massive run up, shares are still “in good shape and in good hands,” according to Houchois, who likes the direction the company is heading under CEO Jim Farley.
Shares fell nearly 8% on Wednesday after Ford disclosed that the $900 million gain from its investment in recently public electric truck maker Rivian will not be included in full-year financial results. The company essentially revised guidance on annual revenue slightly lower because of an accounting change related to the timing of Rivian’s IPO in November.
Ford shares have still risen roughly 230% since auto industry veteran Jim Farley took the helm in October 2020. Beyond helping fix the company’s balance sheet, Farley’s ongoing Ford+ restructuring plan, which focuses more resources into electric vehicles, has been cheered by investors and analysts alike. Ford sold over 27,000 electric Mustang Mach-E vehicles in 2021, while it’s fully electric F-150 pickup truck will begin shipping to customers soon. Amid higher than expected demand for its F-150 Lightning, Ford has already had to double production goals for the vehicle several times in recent months. 
“We think it is premature to re-rate legacy [auto manufacturers] for their electric vehicle progress since earnings remain mostly driven by cyclical shortages, returns remain within historical norms and the EV transition is largely a zero-sum-game initially,” according to the Jefferies analyst.
Jefferies likes several other automakers that the firm thinks provide more upside for investors looking to capitalize on the transition to electric vehicles. Houchois sees Stellantis, formerly known as Fiat Chrysler, as the “legacy catchup” play and has a “buy” rating on the stock. He continues to see Tesla as the “industry threat,” however, assigning Elon Musk’s electric vehicle maker a “buy” rating and price target of $1,400 per share—implying 35% upside from its current levels.
After the recent downgrade from Jefferies, less than half of Wall Street analysts covering Ford give the stock a “buy” rating. The average analyst price target is around $22 per share—slightly below where the stock is currently trading.
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