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HomeBUSINESS & FINANCEWill Robust F-Series Sales drive Ford's Q2 Performance?

Will Robust F-Series Sales drive Ford’s Q2 Performance?

Ford is anticipated to release its Q2 2023 results on July 27, detailing a period in which deliveries continued to increase. We anticipate Ford’s quarterly revenue to be approximately $40.30 billion, representing a 6% increase over the same period last year and coming in slightly ahead of consensus estimates.

We anticipate earnings per share to equal the consensus estimate of $0.54. See our analysis of Ford’s Earnings Preview for a more in-depth look at what to anticipate when the company releases its Q2 results.

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Despite the fact that the automotive industry as a whole is facing some challenges due to rising interest rates and fears of a U.S. recession, Ford reported strong Q2 delivery numbers. Total U.S. vehicle sales increased 10% year-over-year to approximately 531,600 units in the second quarter, primarily due to a surge in truck sales.

The F-Series brand led the way in the year-over-year increase in truck sales, which was about 26%, while SUV and sedan sales fell. After more than a year of significant price increases, Ford had previously projected that vehicle prices would decline by about 5% in 2023 due to some discounting. However, since trucks typically have higher average selling prices, we anticipate that a more favorable sales mix will lessen the impact of this.

We also anticipate a marginal improvement in margins as a result of higher volumes, moderating commodity price inflation, and increased sales of pickup vehicles. Adjusted operating margins increased by 140 basis points to 8.1% in Q1 2023, and we could see a similar increase in Q2.

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While Ford stock could rise if earnings are surpassed, we believe the stock is still undervalued. Ford stock trades for less than eight times the consensus earnings estimate for 2023. We value Ford stock at approximately $18 per share, 29% higher than its current market price.

See our analysis on Ford Valuation: Expensive Or Inexpensive for more information on the factors influencing our Ford price estimate. Check out our dashboard on Ford Revenue: How Ford Makes Money for additional information on the company’s business model and revenue trends.

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