Tomahawk, WI 08/14/2014 (Basicsmedia) – Ford Motor Company (NYSE:F)’s impressive run in the auto industry seen by a 25% increase of sales in China looks to have caught the attention of, James Albertine, an analyst at Stifel Nicolaus, who in an interview on CNBC announced they had upgraded it from a ‘Hold’ to ‘Buy.’ Albertine now has a share price target of $22 on Ford’s stock. A closer look at the auto industry, Albertine maintains that this is a period of innovation driven mostly by consumer needs as well as regulatory demand for efficient technology.
The catalyst that prompted the upgrade includes better than expected increase in sales on a year-over-year basis, as well as the expected launch of the F-150 model and better than expected margin in North America.
“[…] looking at the manufactures and looking at the next cycle we are in a period of incredible and perhaps unprecedented innovation in the auto industry. All manufacturers are chasing MPG standards; they are chasing consumers and all the technology and mobility,seamless integration mobility, request that they have. They can all gain share. I think where Ford is very far ahead, it has to do with the F-150 and the Aluminum body that is going to rolling out with the next model,” said Mr. Albertine
Ford Motor Company (NYSE:F)’s prior model cycle change that happened between 2010 and 2011 helped position the company as a forward-thinking auto company in terms of technology and design. Ford continues to conquer customers in markets where domestic brands traditionally underperformed. Albertine believes that Ford has done almost everything right under the leadership of Alan Mulally for the better part of the past 6 years.
The analyst also stated that most of the players in the auto industry are under gross margin pressure on the fact that sales might stagnate with Ford slightly holding an upper hand in terms of prospects to perform better, going forward
“Everyone is under gross margin pressure, I think ford is a cleaner story.[…] Ford Motor Company (NYSE:F) is a clear story it’s a clear product line, and I argue that they have maybe inherently more cushion as a result of that. They can miss more than others can miss in that Platonic environment if there is another way to say it,” said Mr. Albertine.