Ford slumps in pre-market as UBS downgrades automaker to Hold

Shares of F were down by more than 2% in pre-market trading Wednesday morning as UBS downgraded the Detroit automaker’s shares to a Hold rating (From Buy) after seeing the stock as “more fairly valued.”

“We see more limited upside to estimates over 2024 and 2025 than prior.” Wrote analysts at UBS in a note.

UBS predicts that Ford (NYSE:)’s earnings per share (EPS) for the fiscal year 2024/25 will be $1.70/$1.65, representing a deviation of -4%/-12% from the consensus.

Ford faces similar challenges to other automakers, such as pricing, affordability, labor, and investment. While the company is working on enhancing its capital efficiency, UBS believes Ford may have more obstacles to overcome compared to its peers due to execution and quality issues.

On the other hand, analysts at UBS see greater potential for earnings improvement at its US peer, General Motors (NYSE:).

Despite a positive view on CEO Farley’s vision and the direction for Ford’s future, UBS anticipates that it might take several years before the benefits of these plans materialize.

Shares of F are down 2.49% in pre-market trading Wednesday morning.