Citigroup analyst Michael Ward upgraded Ford Motor Company (F) stock to "Buy" from "Hold" and raised his price target to $20, indicating a potential upside of 28% from current levels. This bullish outlook came on July 29 after Ford reported solid second-quarter earnings and increased its full-year guidance. Ward believes Ford's momentum is improving, especially heading into the second half of 2026, due to factors like accelerated F-Series production, lower warranty costs, improved aluminum supply, and moderating material costs.
Ford's Q2 adjusted earnings per share were $0.42, exceeding Wall Street estimates by $0.07, although revenue of $44.89 billion slightly missed estimates. Despite the revenue miss, investors responded positively as the company raised its full-year adjusted EBIT guidance to between $10 billion and $11 billion, up from a previous range of $8.5 billion to $10.5 billion. Ford also increased its full-year free cash flow guidance to between $6 billion and $7 billion, an increase of $1 billion from its prior estimate.
Key drivers for the optimistic revision include Ford's flagship truck business, with F-series production expected to see a sharp rebound and a 28% jump in the second half of 2026. This would benefit both Ford Blue and Ford Pro divisions. Ward also highlighted substantial cost discipline, with warranty accruals down by about $1 billion year-over-year in the first half of 2026, putting Ford on track to meet its goal of cutting warranty costs by $1.5 billion. Emerging growth vectors like energy-related initiatives and a software and subscription business growing at 20% annually, reaching 1.6 million subscribers, also contributed to the analyst's positive re-rating. Additionally, Ford offers a lucrative dividend yield of 3.84% (trailing 3.88%), providing attractive passive income for investors.
