The sales numbers for July are the reason for a bearish response from investors
on August 3, 2016 07:37 am EST
US automobile giant, Ford Motor Company (NYSE:F) stock experienced three times its average daily trade volumes, as the US automobile sales data was released. Investors responded negatively to the recent developments as Ford stock fell more than 4% in yesterday’s trading session. However, the bulls were able to pull back a little in the after market hours. Apart from Ford Motors, a few of its competitors including General Motors and Toyota Motor Corp also missed their estimates.
The situation may have been worse for Ford, if rival General Motors wouldn’t have decided to exit the fleet market. Fleet sales contributed 6% to the topline of the company. The overall unit sales for Ford Motors stood at 216,479, which implies a 3% YoY decline. Moreover, the average transaction price for the $46.7 billion company rose by $1600 per automobile, as compared to 2015. Ford’s VP for marketing, sales, and service Mark LaNeve said that trucks and vans play a very vital role in Ford’s financial numbers. Moreover, he also added that the F-series reported its best retail sales month in FY16.
Ford Motor’s second quarter earnings have already dissuaded investors as the US automobile industry suffered. A sluggish outlook persists for the current fiscal year, and 2017. That being said, a few of the players in this industry, such as Honda and Fiat Chrysler have shown significant YoY improvements, although they missed their estimates. However, Hyundai-Kia was able to beat the estimates, as it reported an impressive 6% YoY increase in its sales.
Zack’s investment reckons that a shift towards the sale of high margin vehicles would be preferred by auto-makers so as to deliver strong bottom-line results. The street has adversely responded to the recent developments in Ford, as renowned brokerages such as Robert W. Baird reckon a downside. Meanwhile other houses such as JP Morgan & Chase reckon that the automobile manufacturers stock has a significant upside. The consensus TP stands at $14.72.