Motor Vehicles · #14 in the Retail 100

Ford Motor

Our rating: hold
12-month target: $13.70 +11.3%
Expected vs. S&P 500: -2.4 ptsSee the math
Next earnings: Feb 9In 96 daysEarnings calls page ↗

Ford's surprise warranty charges fell 74% this year and turned negative last quarter, yet the stock trades at 6 times next year's earnings, priced like 2025's recall mess.

Summary

Ford's trucks and vans earn most of its profit, while EVs lose about $4B a year. The stock trades at about 6 times next year's earnings because investors still price in 2025's record 152 recalls. That is out of date. Extra money set aside to fix cars Ford already sold fell from $1.69B to $447M in the first nine months, and in Q3 Ford took $28M back. A full return to Ford's usual 7.5 times earnings means about $14.40. Our model only counts a partial return, so it says Hold.

$12.31

+$0.32 (+2.67%)Past year

What Ford Motor does

Ford sells about one in eight new vehicles in the U.S. Its trucks and vans for business fleets earn most of its profit, which pays for heavy losses on electric cars.^23,28

What it sells

Ford Blue54% of revenue, FY2025
Gas and hybrid pickups, SUVs and cars for everyday buyers. The biggest unit by sales, but only 3% was operating profit in 2025.
Ford Pro35% of revenue, FY2025
Trucks, vans, fleet software and repairs for businesses, governments and rental firms. It earned $6.8B of operating profit in 2025, Ford's most.
Ford Credit7% of revenue, FY2025
Loans and leases for Ford buyers and dealers. It helps move vehicles and earned $2.6B before taxes in 2025.
Model e4% of revenue, FY2025
Electric vehicles and the software behind them. It lost $4.8B in 2025 on $6.7B of revenue.

Who buys it

Mostly individual drivers, plus businesses, governments and rental companies through Ford Pro. Nearly all sales go through about 8,200 dealerships, most independently owned, and no single customer is material. The U.S. was 65% of 2025 revenue.

Where you've seen it

Many of the work vans and heavy-duty pickups at U.S. job sites are Ford Transits and Super Duty trucks.

The backstory

Ford's trucks and vans make good money, but two problems drained it: EV losses near $5B a year and a record 152 recalls in 2025, which pushed warranty bills up. The EV losses are shrinking slowly. The warranty problem is shrinking fast, and that is the part the stock price hasn't caught up to.

How the business makes money

Why Ford's trucks have to pay for its EV losses^{1,2,4,23,32,33,34,37}

Step 1
Ford sells America's best-selling pickups. F-Series is on track for its 50th straight year on top.
Step 2
Business fleets buy its trucks, vans and software. Ford Pro earned $6.8B of profit from its operations in 2025, more than any other Ford unit.
Step 3
Warranty repair bills eat truck profit, and they are falling fast: charges for cars already sold dropped 74% in the first nine months of 2026.
Step 4
Electric cars still lose money. Model e expects to lose about $4B in 2026.
What shareholders get
What's left pays a $0.60 yearly dividend, about 5% of the share price.

Advantages

Heavy-duty pickups

Major advantage

Ford's biggest advantage. Super Duty heavy-duty pickups face only GM and Ram, and ambulance and utility-truck builders design their bodies around its frame, so fleets rarely switch. Super Duty anchors Ford Pro, which expects about $7B of profit this year. Q3's 9.4% margin was dragged down by temporary costs: the Novelis aluminum fire and the new Oakville line.^{1,4,28,29,30,31,32,35}

Fleet customers and software

Strong advantage

Hard to dislodge. Ford Pro holds 41% of the Class 1–7 commercial truck and van segment. Over 900,000 paid software subscriptions keep fleets with Ford for tracking, charging and service.^2,4

Hybrid pickups

Supporting

Useful, but narrow. Maverick Hybrid, America's best-selling hybrid pickup, set a third-quarter sales record. F-150 Hybrid sold 34,527 through September.⁴

What's changing

Ford is shifting from EV losses to grid batteries and a $30,000 pickup

Ford is shrinking its EV bet and turning toward grid batteries. It left its BlueOval SK battery joint venture, taking a mostly non-cash $3.6B charge. Its Kentucky battery plant becomes Ford Energy, aiming to make 20 gigawatt-hours a year of grid batteries by late 2027. A $30,000 midsize electric pickup follows in 2027. In September the Transportation Secretary criticized Ford's licensed CATL battery technology, which Ford called a headline grab.^1,2,6,16,17

Competitors

Who else an investor would consider, and how they compare.

Company	Market value	What it does	Compared with Ford Motor
Ford Motorthis stock	$49.08B	Ford sells about one in eight new vehicles in the U.S. Its trucks and vans for business fleets earn most of its profit, which pays for heavy losses on electric cars.
General MotorsGM	$64.38B	Ford's closest U.S. match: trucks and SUVs, plus a wider EV lineup.	GM earned $3.9B in Q2 to Ford's $2.5B, on similar revenue.⁹
TeslaTSLA	$1.55T	Sells only electric cars, plus grid batteries; investors value it on self-driving.	Tesla profits from EVs; Ford's EV unit expects a $4B loss in 2026.¹
StellantisSTLA	$15.08B	Owns Ram and Jeep in the U.S., plus European brands like Peugeot and Fiat.	Ram fights Ford's F-Series head on; Ford's trucks still outsell Ram's.¹¹
ToyotaTM	$290.38B	World's biggest carmaker, betting on hybrids across nearly every model, not pure EVs.	Toyota leads hybrids across cars and SUVs; Ford leads only in hybrid pickups.¹⁰

Leadership

Who runs the company, and how the stock has done under the CEO.

F +148.2%S&P 500 +142.7%Total return with dividends since Oct 2020

202120222023202420252026

Jim FarleyPresident and CEO6 yrs

Sherry HouseCFO1.6 yrs

Kumar GalhotraCOO3 yrs

Alicia Boler DavisPresident, Ford Pro1 yrs

When Farley was named (Aug 2020), the stock moved +2.4% that day; the S&P 500 moved +0.4%.

Wall Street on Farley: MixedJefferies upgraded Ford to Buy, calling the second quarter the low point for sales after fires at aluminum supplier Novelis. Most analysts still rate it a Hold, and Ford expects its electric-vehicle unit to lose $4 billion to $4.5 billion in 2026.^L6,L7

Leadership sources (7) · researched Oct 2026

L1Ford names Jim Farley as new CEO, Jim Hackett to retire · TechCrunch, 2020-08-04
L2Ford CFO swap: Sherry House, GM engineer turned investment banker, rises · Phoebe Wall Howard (Substack), 2025-02-05
L3Ford Establishes New Product Creation and Industrialization Organization to Scale Next-Gen Vehicles and Technology · Ford, 2026-04-15
L4Ford names Galhotra, head of internal combustion engines business, as its chief operating officer · Associated Press via WXYZ, 2023-10-18
L5Veteran leader Alicia Boler Davis named president of Ford Pro · Ford, 2025-07-30
L6A Wall Street Firm Just Turned Bullish On Ford And GM. It Believes Gains Could Be As High As 22% · International Business Times, 2026-07-27
L7Ford CEO Jim Farley knew the EV pain would be bad, but the 'punch line' is a $4.8 billion loss: 'The customer has spoken' · Fortune, 2026-02-12

Bull vs. bear: two bets on the same stock

1
A share is a small slice of the company. Its value comes from the profits the company will make in the future.
2
Nobody knows those profits yet. Buyers (bulls) pay today's price betting they'll beat what most people expect. Sellers (bears) bet they'll fall short.
3
When results come in, the price moves toward whichever side was right, and that side makes money.

The question they disagree on

Can Ford hold about $10B of operating profit in 2027 without this year's $1.3B tariff refund, with lower warranty costs covering about $2B of new cost headwinds?^{32,33,34,35,36,38,39,1,2}

Bull case: why buyers buy

Warranty costs keep falling and the aluminum fire costs go away, so Ford holds $10B or more in 2027 and investors pay its usual multiple again.

The warranty fix shows up in the filings. Charges for cars already sold fell from $1.69B to $447M in nine months, and Ford released $28M in Q3.
Management already targets 2027 profit roughly in line with 2026, despite about $2B of new commodity, memory-chip and shipping costs.
The aluminum fire costs are temporary. Ford absorbed about $1B so far this year and says the supply recovery is largely behind it.
The dividend is covered more than twice. Ford expects $6–7B of free cash flow this year against about $2.4B of dividends.

Bear case: why sellers sell

Ford Pro's margin keeps sliding, a Canada tariff hits the new Oakville Super Duty line, and 2027 profit falls short of $10B once the refund is gone.

The profit engine slipped. Ford Pro's Q3 profit fell 16% to $1.7B, a 9.4% margin, and Ford now expects about $7B for the year.
Oakville, in Ontario, just started building Super Duty trucks for the U.S. A threatened 50% tariff on Canadian vehicles would hit exactly those trucks.
Raw materials keep getting pricier. Ford now expects commodity costs nearly $2.5B higher than last year, about $500M worse than before.
EVs still lose about $4B a year, and Ford says the next step up in Model e profit doesn't come until 2028.

Where Delphi landsholdWe think today's price already weighs both sides fairly.See why

What to watch

The numbers that will settle the debate.

Warranty charges on cars already sold▲ improving

Minus $28M in Q3 (Ford released reserves); $447M in the first nine months, down from $1.69B a year earlier^33,34

The cleanest read on Ford's quality fix, and the profit investors haven't priced in yet.

Ford Pro operating margin▼ worsening

9.4% in Q3, as profit fell 16% to $1.7B on commodity costs and Oakville launch costs³²

Ford Pro, which sells to business fleets, is Ford's main profit engine.

Adjusted operating profit▲ improving

$2.7B in Q3, 5.4% of revenue; full-year forecast raised to $10.5–11B³²

Shows whether Ford can hold about $10B in 2027 once the tariff refund drops out.

Next earnings report

Feb 9

In 96 days

Earnings calls page ↗

Expected earnings per share: $0.38
Expected revenue: $48.55B

What to listen for: Ford's first formal 2027 forecast: whether "roughly in line" means $10B or more of operating profit, and whether warranty charges on old cars stay under $500M.^32,35

What would prove this wrong

✕Warranty charges on cars already sold top $500M in any quarter.
✕Ford's 2027 operating profit forecast comes in below $10B.
✕Ford Pro margin stays below 10% after Novelis and Oakville costs fade.
✕Model e losses stay near $4B a year after the $30,000 pickup launches.
✕Ford cuts its $0.15 quarterly dividend.

Our ratingHoldas of Nov 3 close, $12.31 · what ratings mean

on our model. Ford trades at 6.6 times mid-cycle earnings, and the model credits only part of a return to its 7.5 times norm. Warranty is the upside.

12-month target: $13.70 (+11.3%)
Plus dividend: +4.8%
S&P 500, same method, with dividends: +18.5%
Expected vs the market: -2.4 points

The math behind the recommendation

Three 12-month price scenarios, weighted by probability, compared with the S&P 500 under the same method.

Now $12.31

Target $13.70

bull case30% likely

$16.30 +32%

Warranty costs keep falling and the aluminum fire costs go away, so Ford earns $10B or more in 2027 and investors pay its usual multiple again.

$2.04 mid-cycle earnings per share × 8 = $16.30

base case50% likely

$13.38 +9%

Ford holds 2027 profit roughly flat, as Farley targets, with warranty savings offsetting new costs. The stock stays cheap until February confirms it.

$1.92 mid-cycle earnings per share × 7 = $13.38

bear case20% likely

$10.58 -14%

Ford Pro's margin keeps sliding, the Canada tariff hits Oakville, and operating profit falls below $10B once the one-time refund is gone.

$1.83 mid-cycle earnings per share × 5.8 = $10.58

Why these odds: Ford beat estimates in each of the last three quarters and raised the low end of its 2026 profit forecast after Q3. 2027 estimates rose over 90 days but slipped in the last 30.

How the prices are built: Wall Street expects mid-cycle earnings per share of $1.92 for the year starting a year from now (analysts range from $1.74 to $2.15). Today the stock trades at 6.8 times next year's mid-cycle earnings per share; its five-year middle is 7.48.^{7,18,19,22,23,24,25,26,27,32,35}

What tests the call: Q4 results and Ford's first formal 2027 forecast (Feb 4)

Buy means expected to beat the S&P 500 by 10+ points over 12 months; Sell means expected to trail it by 10+. Inputs gathered Oct 29; the recommendation updates with the price every day. Model-generated, not personalized investment advice. How ratings work · Track record

What the price assumes

At $12.31, investors pay less for each dollar of Ford Motor's mid-cycle earnings than for the average stock's

Ford Motor trades at 6.8 times the mid-cycle earnings analysts expect over the next 12 months. That ratio is the multiple: what investors pay today for each dollar of a year's mid-cycle earnings. That is below its five-year middle of 7.5.

Analysts expect mid-cycle earnings to grow about 6% the year after, against about 16% for the S&P 500. The S&P 500 trades at 19 times. At the market's multiple, today's price would only make sense if Ford Motor earned about 64% less than forecast over the next year.

Ford Motor multiple: 6.8×
S&P 500 multiple: 19×
Base case: +9%
Bear case: −14%

The skewOur bear case loses about $1.62 for every $1 our base case makes. That ratio, how much you stand to lose against how much you stand to make, is the skew.

Last earnings

Q3 2026 results, reported Oct 28

Adjusted earnings beat by 8 cents a share, Ford raised the low end of its 2026 profit forecast to $10.5B, and Farley targeted a roughly flat 2027.^32,33,35,36

Reported Oct 28	Expected	Actual	Difference
Earnings per share	$0.41	$0.49	+19.5%
Revenue	$49.08B	$49.53B	+0.9%

Stock reaction: -1.4% after hours on Oct 28, to $11.78

Why the stock moved

Up: adjusted EPS of $0.49 beat the $0.41 consensus, and Model e lost 25% less.
Up: warranty charges on cars already sold turned negative, a $28M release in the quarter.
Down: Ford Pro profit fell 16% to $1.7B on commodity costs and Oakville launch costs.
Down: Ford raised its 2026 commodity cost hit to nearly $2.5B, about $500M worse.

What it means for the stock: Strengthened it. The warranty fix showed up in the 10-Q, and a flat 2027 means Ford absorbs about $3B of new costs and the refund roll-off.