Ford stock price lost a third of value so far this year amid slower demand and global economic meltdown. The shares of one of the oldest vehicle makers are under pressure at the moment due to the expectations for an annual loss.
However, the business and economic prospects are steadily improving over the past two months while some market analysts anticipate a V-shaped recovery in the second half of the year.
China’s auto sales grew for the fourth straight month in July. China’s auto sales jumped 16.4% in July from the past year period. European auto markets have also experienced robust sales growth in the past few months.
Japanese carmakers have also been enhancing their production potential. For instance, Japanese Toyota Motor Corporation announced to cut production by only 3% in August from last year compared to a 10% cut in July and 40% in June. US auto industry is also likely to see sharp auto sales growth in the second half due to low-interest rates and easy loan policies.
The consumer’s shift towards electric vehicles is likely to improve auto sales. Ford has been aggressively following consumer trends. The company plans to launch the first electric vehicle by the end of this year. Ford is also planning to launch a Hybrid F-150 pick-up truck next year.
Ford has generated a second-quarter adjusted EBIT loss of $1.9 billion compared to analyst’s expectation for a loss of $4.71 billion. Its automotive revenue of $16.62 billion dropped 53.5% from the past year period but topped the consensus estimate by $990 million.
Ford share price is currently trading around $7, down sharply from 52-weeks high of $9.50 per share. Its shares bottomed around $4 in April. Ford stock price recovered strongly in the past few months while the market pundits expect Ford shares to sustain the upside momentum in the coming days amid economic recovery and easing social distancing policies.