Stocks Ford Motor Company (Nyse: f) close to 52-week low. The domestic car manufacturer recently completed his fiscal year in 2024, with great losses in his business on electric vehicles, deleting much of the earnings from the sale of combustion models. In addition, enhanced volatility due to permanent trade conflicts with Mexico and Canada threatens tariffs on goods and materials imported into the United States.
Today, shares to investors offer a huge 6.3% dividend and trade on just a fraction of value assessment S & P 500 index. Sometimes the shares become cheap when the company deals with increased uncertainty. Ford could now be an example of that. Ford stocks, on the other hand, could be cheap for good reasons. Missed companies can lure investors Cheap priceJust to make a bad appearance.
So what is it? Is Ford to buy now?
Life in a car business is not easy. This is mercilessly competitive. Ford factory cost a lot of money to work, and there is an abundance of competition with both domestic and foreign brands. However, Ford deals with additional headaches that have withdrawn supplies.
First, the company loses a lot of money trying to balance its profitable engine business with inherited combustion with a potential future in electric vehicles. Ford lost about $ 5 billion on consumer electric vehicles in 2024, compensated for about $ 14.2 billion in profit from the consumer combustion model (Ford Blue) and sell professional, government and commercial clients (Ford Pro).
Second, the permanent trade conflicts of the US government with Canada and Mexico could result in tariffs on imported goods and materials, such as steel used to build a vehicle. Ford administration noticed a company Call of Earnings in the Fourth quarter These prolonged tariffs would significantly harm the business. The tariffs could eat profit and reduce the new demand of the vehicle by increasing prices.
Third, the economic background became a little worrying. A typical interest rate on a new loan for the vehicle is almost 7.5%, which is high near a decade. Total credit card debt in the United States has been all the time, while the personal savings rate is close to its lowest since 2016. Vehicles are items with big tickets, so they are less likely that people will buy them when their money is tight.
Due to the tariff and signs of economic warning, Ford today is undoubtedly a risk supply. Still, the job is financially stable. At the end of the year, Ford reported that he had $ 28 billion in cash and $ 47 billion in liquidity, so even though it was a challenging job, Ford in no way circles the drain. The administration also increases its electrical ambitions to focus on hybrid vehicles to achieve more profitable balance.
