According to the latest issue of Barron's, Ford Motor (F.US) received positive comments. Although the company's performance this year has not met market expectations, the Michigan-based auto giant seems ready to catch up with its main competitor in Detroit, General Motors (GM.US).
So far this year, Ford's stock has only risen by about 7%, compared to General Motors, whose stock has soared more than 29%, and the S&P 500 index (SPY.US) has risen by about 17%.
"In two major American auto manufacturers, it's not often that one lags behind the other," Barron's said. The magazine further added that, although the two companies' financial conditions are similar, market investors seem not to have fully realized this.
However, for Ford, which has a slightly weaker performance, "all it takes is one catalyst" to narrow this gap. Barron's believes that capital discipline will be the key factor driving this change.
The magazine expects Ford to issue a special dividend of up to $2.60 per share, reduce spending on electric vehicles, and focus more on product quality, which will help reduce warranty costs and thus achieve the company's goals.
At the same time, the strong growth of the US auto market will also have a positive impact on Ford. It is expected that by 2024, Americans will buy about 16 million new cars, an increase from about 15.5 million in 2023.
"Considering these factors, cutting capital budgets may be the best sign for Ford to take its stock price seriously. Investors should do the same," Barron's said.
However, according to Seeking Alpha's quantitative system, Wall Street analysts, and Seeking Alpha analysts, Ford is still in a "hold" status.
Seeking Alpha analyst Manuel Paul Dipold gave a "sell" rating to Ford this week, believing that Ford's most important market, the US market, is "stagnating" and that its valuation appears cheap only on non-GAAP metrics.
Although Barron's is optimistic about Ford's prospects, the views of market analysts and quantitative systems are more cautious. Whether Ford can use capital discipline and other strategies to narrow the gap with General Motors remains to be further observed by the market and investors.