Ford Motor (F) — Deep Dive¶
Prices as of the Mon 05 Oct 2026 close · data pulled 2026-10-06 07:32:00+00:00 · refreshed weekly · methodology
Not investment advice
Educational analysis built from public data (Yahoo Finance, Kenneth French Data Library) and explicit model assumptions. Numbers update automatically; the qualitative notes are dated.
Balance-sheet adjustment
Ford's consolidated balance sheet carries Ford Credit's debt, which funds customer and dealer loans and is matched by finance receivables. Following the usual treatment of captive finance arms, the DCF uses automotive net cash of roughly zero instead of the consolidated figure; check the 'Company excluding Ford Credit' table in the 10-Q.
Verdict: Accumulate on weakness — 5/8 checks pass
Ford Motor is profitable on an owner-FCF basis, with net debt of USD -0.0bn and consensus revenue of 177.3bn for FY2026 and 180.7bn for FY2027 (+2%). At USD 12.15 the base-case DCF of USD 18.58 (+53%) sits above the price; on the base growth path the price needs only a 2% owner-FCF margin (base case 4%).
| Check | Pass | Evidence |
|---|---|---|
| Valuation: base-case DCF at or above price | ✅ | base DCF USD 19 vs price USD 12 |
| Relative value: forward P/E at most 1.2x the peer median | ✅ | 6.2x FY2027E vs peer median 6.4x |
| Street: de-biased, shrunk analyst alpha > 0 (ch27) | ✅ | +1.8% |
| Momentum: 12-1 month return > 0 (ch11) | ✅ | +23% |
| Trend: price above 200-day MA (ch12) | ❌ | -8% vs 200DMA |
| Not overbought: RSI(14) below 70 | ✅ | RSI 33 |
| Fundamentals: revenue growing and FCF positive | ❌ | revenue -4% y/y, TTM FCF 7.3bn |
| Balance sheet: net cash | ❌ | net cash 0.0bn |
Snapshot¶
| Metric | Value | Metric | Value |
|---|---|---|---|
| Price | USD 12.15 | Market cap | USD 47.6bn |
| Enterprise value | USD 47.6bn | Net cash | USD 0.0bn |
| 52-week range | 10.90 – 17.25 | From 52w high | -29.6% |
| Trailing P/E (GAAP) | n/m | Forward P/E FY2026 / FY2027 | 6.5x / 6.2x |
| PEG (FY+1 P/E ÷ EPS growth) | 1.21 | EV / TTM revenue | 0.3x |
| TTM revenue | USD 188.0bn | TTM FCF / after SBC | 7.3bn / 6.8bn |
| Beta vs SPY (raw / Blume) | 1.95 / 1.63 | Realized vol 20d / 1y | 32% / 38% |
| Analysts / mean target | 18 / USD 16 (+31.9%) | Next earnings | 2026-10-28 |
| Shares out (diluted proxy) | 3.917bn | Short interest (% float) | 3.3% |
| Sector ETF benchmark | XLY | Cash runway (cash ÷ FCF burn) | n/a (FCF positive) |
| Institutions / insiders | 68% / 0.40% | Dividend | USD 0.60 |
1. Price over time¶
| Ticker | 1M | 3M | 6M | YTD | 1Y | 3Y | 5Y | 10Y | 10Y CAGR |
|---|---|---|---|---|---|---|---|---|---|
| F | -17% | -11% | +7% | -4% | +0% | +22% | +16% | +65% | 5.1% |
| XLY | -4% | -6% | +2% | -7% | -6% | +41% | +28% | +206% | 11.8% |
| SPY | +1% | +3% | +18% | +15% | +17% | +87% | +91% | +321% | 15.5% |
| GM | -9% | +3% | +10% | -1% | +35% | +168% | +54% | +196% | 11.5% |
| TM | -7% | +2% | -10% | -14% | -5% | +11% | +18% | +99% | 7.1% |
| STLA | -19% | -23% | -40% | -59% | -58% | -73% | -68% | +28% | 2.5% |
| TSLA | +7% | -10% | +7% | -16% | -12% | +45% | +46% | +2625% | 39.2% |
| HMC | -3% | +7% | +33% | +8% | +1% | +4% | +19% | +37% | 3.2% |
Largest one-day moves in the last 5 years: 25 Jul 2024 -18.4%, 20 Sep 2022 -12.3%, 27 Oct 2023 -12.2%, 13 May 2026 +13.2%, 24 Oct 2025 +12.2%.
2. Return and risk (ch.5)¶
Statistics use the 60 complete months to Sep 2026.
| Statistic | Value | What it means |
|---|---|---|
| Arithmetic mean (annualized) | 12.6% | Expected one-period return if the past repeats |
| Geometric mean (CAGR) | 3.0% | What a buy-and-hold investor actually earned; the gap ≈ σ²/2 is volatility drag |
| Standard deviation (annualized) | 44.9% | 2.9× the S&P 500's 15.7% |
| Skewness / excess kurtosis | 0.67 / 1.85 | Right-skewed, fat tails vs normal |
| 5% monthly VaR: historical / normal | -18.7% / -20.3% | One month in 20 loses at least this much |
| 5% monthly expected shortfall | -22.4% | Average loss in that worst 5% of months |
| Sharpe ratio (S&P 500) | 0.20 (0.67) | Excess return per unit of total risk |
| Sortino ratio | 0.31 | Excess return per unit of downside risk |
| Max drawdown, 5y | -56.5% (trough Apr 2025) | Currently -34.6% from the peak |
3. Index model, CAPM and factors (ch.8–10)¶
| Regression (60m excess returns) | Alpha (ann.) | t(α) | Beta | t(β) | R² | Residual σ |
|---|---|---|---|---|---|---|
| vs SPY | -11.4% | -0.75 | 1.95 | 6.98 | 0.46 | 33.2% |
| vs XLY | +4.4% | 0.28 | 1.28 | 6.35 | 0.41 | 34.5% |
- Risk decomposition (ch.8): systematic variance β²σ²(M) = 9.3% vs firm-specific σ²(e) = 11.0%, so 46% of the risk is market-driven and 54% is diversifiable.
- CAPM required return (ch.9): k = r_f + β × MRP = 4.02% + 1.95 × 5.5% = 14.7% (Blume-adjusted β 1.63 → 13.0%, used as the DCF discount rate).
- Historical alpha of -11.4% a year has a t-stat of -0.75: not statistically distinguishable from zero (ch.11: past alpha is a weak guide).
- Fama-French 5 factors + momentum (ch.10, 150 months to Jul 2026): R² 0.41, alpha -5.7% (t -0.68). Loadings: Mkt-RF +1.37 (t 8.0), SMB -0.16 (t -0.6), HML +0.49 (t 1.8), RMW -0.31 (t -1.0), CMA -0.16 (t -0.4), Mom -0.37 (t -1.9). The loadings describe a size-neutral, value, low-profitability return profile (SMB > 0 small-cap, HML < 0 growth, RMW < 0 weak profitability, CMA < 0 aggressive investment).
4. Portfolio fit: allocation and diversification (ch.6–7)¶
Correlation of monthly returns with F (60m): XLY 0.64, SPY 0.67, GM 0.74, TM 0.45, STLA 0.57, TSLA 0.40, HMC 0.43.
- A 50/50 mix with SPY would have had volatility of 28.3% vs 30.3% for the weighted average of the two, a diversification benefit because ρ = 0.67 < 1.
- Optimal risky share y* = [E(r) − r_f] / (A·σ²), holding F alone against T-bills (σ = 44.9%):
| Risk aversion A | y* with CAPM E(r) | y* with E(r) + Street α |
|---|---|---|
| 2 | 27% | 31% |
| 3 | 18% | 21% |
| 4 | 13% | 16% |
| 6 | 9% | 10% |
Even a risk-tolerant investor would put only a modest share in a single stock this volatile. Ch.7–8 say the efficient choice is the market portfolio plus a Treynor-Black tilt (section 9), not a concentrated position.
5. Financial statements: quality of earnings (ch.19)¶
| Quarter | Revenue | Q/Q | Gross m. | Op. m. (GAAP) | Net m. | R&D % | SBC % | Diluted EPS | FCF | FCF m. | DSO (days) | DIO (days) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025-06 | 50.2bn | n/a | 6.4% | 1.0% | -0.1% | n/a | 0.3% | -0.01 | 4.23bn | 8.4% | 122 | 33 |
| 2025-09 | 50.5bn | +1% | 8.5% | 3.1% | 4.8% | n/a | 0.3% | 0.60 | 5.28bn | 10.4% | 121 | 32 |
| 2025-12 | 45.9bn | -9% | -18.7% | -25.2% | -24.1% | n/a | 0.2% | n/a | 1.10bn | 2.4% | 128 | 26 |
| 2026-03 | 43.3bn | -6% | 11.9% | 5.4% | 5.9% | n/a | 0.3% | 0.63 | -1.06bn | -2.5% | 133 | 39 |
| 2026-06 | 48.3bn | +12% | 6.9% | 1.3% | -2.7% | n/a | 0.2% | -0.33 | 1.96bn | 4.1% | 119 | 34 |
- DuPont, TTM: ROE -18.3% = net margin -3.9% × asset turnover 0.65 × leverage 7.20. Net income is negative, so ROE is negative; the business is not yet earning its cost of equity.
- Cash conversion: TTM operating cash flow 16.9bn vs net income -7.4bn. The accruals ratio of -8.4% of assets is negative (cash earnings exceed accounting earnings), a sign of high-quality earnings.
- Stock-based compensation of 0.4bn TTM (0.2% of revenue) is a real cost to shareholders. The valuation below uses FCF after SBC (owner FCF margin 3.6%). Buybacks were 0.3bn; share count changed +1.1% over the year.
- Operating leverage (ch.17): not meaningful: EBIT was negative or sales barely moved between the last two fiscal years.
6. Valuation (ch.18)¶
Multiples vs peers (Yahoo Finance, TTM and next-year; peers chosen by hand in config.json):
| Ticker | Fwd P/E | P/S TTM | EV/EBITDA | FCF yield | Rev. growth FY | Gross m. | EBIT m. | ROE TTM | Target upside |
|---|---|---|---|---|---|---|---|---|---|
| F | 6.2x | 0.3x | 24.8x | -16% | -4% | 7% | 2% | -18% | 32% |
| GM | 5.3x | 0.4x | 10.7x | 31% | 2% | 10% | 3% | 3% | 30% |
| TM | 11.7x | 0.0x | 6.3x | n/a | 10% | 17% | 8% | 12% | 27% |
| STLA | 3.6x | 0.1x | -107.4x | n/a | 13% | 7% | 2% | -29% | 54% |
| TSLA | 176.6x | 14.4x | 136.6x | 0% | 26% | 19% | 1% | 5% | 5% |
| HMC | 6.4x | 0.0x | 7.2x | n/a | 14% | 17% | 9% | -1% | 5% |
| Peer median | 6.4x | 0.1x | 7.2x | 16% | 13% | 17% | 3% | 3% | 27% |
Growth embedded in the price (PVGO). With FY2027E EPS of USD 1.96 and k = 13.0%, the no-growth value E₁/k is USD 15.05. PVGO = USD -2.90, which is -24% of the price: the price is below the no-growth value, so the market expects earnings to shrink or doubts their durability. No-growth P/E = 1/k = 7.7x vs the actual 6.2x.
Constant-growth check. On TTM owner FCF, P = FCF₁/(k − g) implies a perpetual growth rate of -1.9%, below the 4% long-run nominal-GDP ceiling the book recommends for g.
Scenario DCF (owner FCF, k = 13.0%, terminal g = 4%). The revenue path is FY2026 (177.3bn), then the FY2027 low/avg/high estimate, then growth that fades linearly to 4% over 8 years. Owner-FCF margin ramps from today's 3.6% to the scenario margin over 3 years. Scenario assumptions are generic (derived from consensus growth and today's owner-FCF margin).
| Scenario | FY2027 revenue | Growth after | Owner-FCF margin | FY2035 revenue | Terminal value share | Value / share | vs price |
|---|---|---|---|---|---|---|---|
| Bear | 172.0bn | 2% | 3% | 212bn | 45% | USD 12.93 | +6% |
| Base | 180.7bn | 3% | 4% | 239bn | 47% | USD 18.58 | +53% |
| Bull | 192.9bn | 5% | 4% | 280bn | 49% | USD 26.27 | +116% |
Reverse DCF: what today's price assumes. On the base revenue path the price requires a steady-state owner-FCF margin of 2%. At the base 4% margin it requires -10% growth after FY2027, or a discount rate of 18.0% (vs the model's 13.0%).
Sensitivity: base revenue path, value per share by discount rate (rows) and steady-state owner-FCF margin (columns).
| k \ margin | 2% | 3% | 4% | 5% |
|---|---|---|---|---|
| 10.0% | 16.02 | 23.26 | 30.50 | 37.74 |
| 11.0% | 13.86 | 20.03 | 26.21 | 32.38 |
| 12.0% | 12.24 | 17.61 | 22.98 | 28.35 |
| 13.0% | 10.98 | 15.73 | 20.48 | 25.22 |
| 14.0% | 9.97 | 14.22 | 18.47 | 22.72 |
Earnings-multiple cross-check: FY2027E EPS USD 1.96 × 20x = 39.12, 25x = 48.91, 30x = 58.69, 35x = 68.47, 40x = 78.25, 45x = 88.03. The price implies 6x. The FY2027 EPS range across analysts is 1.74–2.15.
7. Market efficiency and earnings reactions (ch.11)¶
Market-model abnormal returns (vs SPY, estimated over the 250 days before each event) for the last 12 releases:
| Announced | Reaction day | EPS vs est. | Surprise | AR day 0 | CAR [−1,+1] | Drift CAR [+2,+20] |
|---|---|---|---|---|---|---|
| 2026-07-28 | 2026-07-29 | 0.42 vs 0.35 | 21.3% | +4.1% | +0.8% | -9.6% |
| 2026-04-29 | 2026-04-30 | 0.66 vs 0.19 | 256.6% | -2.3% | -5.6% | +36.3% |
| 2026-02-10 | 2026-02-11 | 0.13 vs 0.19 | -32.9% | +2.0% | +4.2% | -13.8% |
| 2025-10-23 | 2025-10-24 | 0.45 vs 0.36 | 25.4% | +11.4% | +5.0% | +1.0% |
| 2025-07-30 | 2025-07-31 | 0.37 vs 0.33 | 11.1% | +2.3% | -0.2% | +7.2% |
| 2025-05-05 | 2025-05-06 | 0.14 vs 0.02 | 557.0% | +3.5% | +1.1% | -2.9% |
| 2025-02-05 | 2025-02-06 | 0.39 vs 0.32 | 20.4% | -7.8% | -8.7% | +17.3% |
| 2024-10-28 | 2024-10-29 | 0.49 vs 0.47 | 3.5% | -8.5% | -5.0% | +5.7% |
| 2024-07-24 | 2024-07-25 | 0.47 vs 0.68 | -31.3% | -17.6% | -17.0% | -0.6% |
| 2024-04-24 | 2024-04-25 | 0.49 vs 0.44 | 12.2% | +1.3% | -1.6% | -7.2% |
| 2024-02-06 | 2024-02-07 | 0.29 vs 0.12 | 137.7% | +5.0% | +9.1% | -3.2% |
| 2023-10-26 | 2023-10-27 | 0.39 vs 0.46 | -14.5% | -11.6% | -15.1% | -3.4% |
- Average absolute day-0 abnormal move: 6.4%. The sign of the EPS surprise matched the sign of the reaction 67% of the time, which is close to a coin flip: guidance and commentary matter more than the headline EPS beat.
- Post-announcement drift: the correlation between the initial reaction and the next-20-day drift is -0.28. There is no reliable post-earnings drift, consistent with semi-strong efficiency.
8. Technicals and behavioural signals (ch.12)¶
| Indicator | Value | Read |
|---|---|---|
| Price vs 50-day / 200-day MA | -11% / -8% | Golden cross (50 > 200) |
| RSI(14) | 33 | Neutral |
| 12-1 month momentum | +23% | Positive (Jegadeesh-Titman) |
| 6-month relative strength vs XLY | +5% | Leader |
| Insider sales / purchases, last 6m | USD 0.00bn / USD 0.00bn | Net insider buying: an informative signal (ch.11) |
| Analyst actions, last 90 days | 10 actions, 10 target raises | Targets chasing the price is a sign of anchoring and herding (ch.12) |
| Recent targets below current price | 0% | Most targets still sit above the price |
| Ratings (strong buy / buy / hold / sell) | 3 / 5 / 12 / 0 | Mixed views: less crowded positioning |
| FY2027 EPS estimate: now vs 90 days ago | 1.96 vs 1.83 | +7% revision; up/down revisions in the last 30 days: 1/0 |
9. Treynor-Black: should an active manager overweight it? (ch.27)¶
| Step | Value |
|---|---|
| Analyst-implied 12m return (mean target / price − 1) | +31.9% |
| CAPM 1-year required return (raw β) | 14.7% |
| Raw alpha | +17.2% |
| Minus average analyst optimism bias (Top-30 cross-section) | -9.9% |
| Shrunk alpha (× 0.25, for forecast imprecision) | +1.8% |
| Residual variance σ²(e) | 11.0% |
| Initial active weight w₀ = [α/σ²(e)] / [E(R_M)/σ²_M] | +7.4% |
| Beta-adjusted weight w* = w₀ / [1 + (1 − β)w₀] | +8.0% |
A positive weight means an active manager would hold more than its index weight.
10. Options market view (ch.20–21)¶
| Expiry | Days | ATM IV | Implied ±1σ move to expiry | 90% put − 110% call IV (skew) |
|---|---|---|---|---|
| 2026-10-16 | 11 | 31% | ±5.4% (±0.66) | +4.6% |
| 2026-10-23 | 18 | 31% | ±7.0% (±0.85) | -2.0% |
| 2026-10-30 | 25 | 41% | ±10.6% (±1.29) | +1.4% |
| 2026-11-06 | 32 | 41% | ±12.0% (±1.46) | +2.9% |
| 2026-11-13 | 39 | 40% | ±13.1% (±1.59) | +5.7% |
| 2026-11-20 | 46 | 39% | ±14.0% (±1.70) | +6.5% |
| 2026-12-18 | 74 | 63% | ±28.5% (±3.46) | +4.8% |
| 2027-01-15 | 102 | 36% | ±18.8% (±2.28) | +6.5% |
| 2027-03-19 | 165 | 37% | ±24.9% (±3.03) | +7.5% |
| 2027-06-17 | 255 | 37% | ±31.0% (±3.76) | +9.0% |
| 2027-09-17 | 347 | 38% | ±36.9% (±4.48) | +10.1% |
- Earnings-implied move: the jump in variance from the 2026-10-23 expiry (IV 31%) to 2026-10-30 (IV 41%) prices an earnings-day move of ±6.8% (1σ), or about ±5.4% in absolute terms (≈ ±0.65). Compare the historical average absolute reaction of 6.4% in section 7.
- Implied vs realized: the ~1-month ATM IV is 41% vs realized 32% (20d) / 31% (60d) / 38% (1y). Options are rich relative to realized volatility, which favours premium sellers (covered calls, cash-secured puts).
- Put-call parity (ch.20): at the ATM strike for 2026-11-06, C − P − (S − PV(K)) = +0.01 per share. Close to zero, as parity requires.
- Quotes were unavailable when the data was pulled (outside market hours), so implied vols use each contract's last trade price. Treat them as approximate; illiquid strikes can be stale.
Premium-selling menu for holders: the last expiry before earnings (2026-10-23), about 0.15/0.20/0.25/0.30 delta.
| Type | Strike | Bid / Ask | Price | IV | Delta | P(expires OTM) | Distance | Yield | Annualized | OI |
|---|---|---|---|---|---|---|---|---|---|---|
| Call | 13.0 | – | 0.08 | 31% | +0.18 | 84% | +7.0% | 0.66% | 13% | – |
| Put | 9.5 | – | 0.25 | 117% | -0.14 | 80% | -21.8% | 2.63% | 53% | – |
| Put | 11.5 | – | 0.11 | 33% | -0.21 | 77% | -5.3% | 0.96% | 19% | – |
Calls = covered calls on shares you own (yield on the share price); puts = cash-secured puts (yield on the strike). Prices are last trades at the data pull and indicative only; check live quotes before trading.
11. Our hourly signal model¶
F is not in the Top-30 signal universe.
12. Qualitative analysis: business, PEST, catalysts and risks¶
Qualitative notes reviewed 2026-10-06
These notes are written by hand, unlike the auto-refreshed numbers above. Events up to late 2025 come from company announcements. Later developments are inferred from the data (consensus estimates, price reactions) and should be checked against F's 10-Q/10-K filings and earnings calls.
Business in one paragraph¶
Ford is a global automaker organized around Ford Blue for combustion and hybrid vehicles, Ford Model e for electric vehicles, Ford Pro for commercial vehicles and services, and Ford Credit. Profit is concentrated in trucks, SUVs, vans, parts, software-enabled fleet services and financing rather than pure EV volume. F-Series, Super Duty, Transit, Bronco and commercial uptime products are the franchise. The investment case hinges on whether Ford Pro and truck pricing can fund EV restructuring, warranty improvement, shareholder returns and the next product cycle without another quality or labor-cost setback.
Key developments¶
| When | Event | Why it matters |
|---|---|---|
| Oct 2023 | Ford reached a new UAW contract after the Detroit auto strike. | Locked in higher labor cost but reduced strike uncertainty for the current product cycle. |
| Jan-Aug 2024 | Ford cut F-150 Lightning output, delayed some EV projects and cancelled a planned three-row electric SUV. | Confirmed slower EV adoption and shifted capital toward hybrids, software and lower-cost EV platforms. |
| 2024 | Model e posted heavy losses while Ford Pro remained a major profit engine. | The segment split made clear that commercial vehicles fund the transition. |
| Aug 2025 | Ford outlined a Universal EV platform and production system for a lower-cost midsize electric pickup (reported). | A reset toward affordable EVs could improve competitiveness, but execution is still several product cycles away. |
| 2025 | Management kept emphasizing quality, warranty reduction and disciplined EV capital. | Warranty leakage has been a persistent drag; better launches are needed for durable margins. |
PEST analysis¶
| Factor | Tailwinds | Headwinds | Net |
|---|---|---|---|
| Political | US manufacturing footprint, fleet electrification incentives and infrastructure spending support Ford Pro. | Tariffs, emissions rules, UAW costs and EV-credit changes can hit costs and mix. | ⚖️ |
| Economic | Trucks, vans, parts and Ford Credit benefit when small businesses and fleets spend. Hybrid demand can bridge the EV transition. | High rates pressure affordability and credit losses; cyclical auto demand and warranty reserves can erase operating leverage. | ⚖️ |
| Social | F-Series loyalty, strong dealer network and commercial trust are durable advantages. | Younger buyers and coastal markets may see Ford as less innovative than EV-native rivals; recalls hurt reputation. | ⚖️ |
| Technological | Pro telematics, over-the-air software, hybrids and manufacturing know-how can deepen fleet relationships. | Battery cost, software complexity and EV platform delays leave Ford behind Tesla, BYD and some Chinese peers in pure EVs. | ⚠️ |
Bull case vs bear case¶
- Bull: Ford Pro compounds, Super Duty and F-Series pricing stays rational, warranty costs trend down, and hybrid demand buys time for a cheaper EV platform. Model e losses narrow without starving the profitable truck and commercial franchises.
- Bear: EV losses remain large, warranty issues keep recurring, tariffs and labor costs compress margins, and Ford Credit weakens in a downturn. A delayed affordable EV platform would leave Ford defending old profit pools while competitors reset price expectations.
Catalysts to watch (next 6–12 months)¶
- Late October 2026 Q3 results: warranty accruals, Ford Pro margin and tariff commentary.
- Updates on Universal EV platform milestones and battery sourcing.
- Super Duty, F-Series and hybrid order trends.
- Ford Credit delinquencies and used-vehicle residual values.
- Capital return guidance versus restructuring and EV investment needs.
What would change the verdict¶
- More constructive: multiple quarters of lower warranty cost, stable truck pricing, Ford Pro growth, and clearer evidence that Model e losses have peaked.
- More cautious: renewed recall spikes, weaker commercial demand, credit deterioration, or another major EV delay/write-down.
Generated by analyses/deep-dives/deep_dive.py. Quantitative sections refresh weekly; the qualitative notes carry their own review date.