Michael Wayland / CNBC
The company’s stock price has practically doubled since Farley took over the company on October 1. That includes a 12.6% increase last week after the launch of the company’s new F-150 Lightning electric pickup truck.
Investors will be watching the highly anticipated investor event to see if Farley can maintain the momentum. He promised to provide details on the direction of his management team for the automaker.
« [It’s] A big deal. This is the night out for my management team, “said Farley last week.” Yes, we’ve had a few good quarters. It’s great, but the big test is really what our plan is for the business and how it’s going to add value. ”
“Since Jim Farley took over as CEO, Ford has promised increased and measurable transparency [key performance indicators] so that we can monitor Ford’s progress and execution, “said Joseph Spak, analyst at RBC Capital Markets.” We expect these, as well as the financial goals, to be detailed at the event. .
Other expectations range from a clear path for the company to achieve an adjusted 8% profit margin to new details regarding its electric and autonomous vehicle projects. Here are additional details on these items and more.
One of the main goals analysts want to see is a long-promised 8% global adjusted profit margin target, of which 10% is in North America and 6% in Europe. The 8% was promised by Hackett as well as his predecessor, Mark Fields, as part of a “vision 2020” that never happened.
“We will be looking for an update and a bridge to Ford’s 8% margin target,” Citi analyst Itay Michaeli said in a note Friday. “The more details the better. While out-of-year consensus estimates appear to be in line with Ford’s target of ~ 8%, Investor Day is an opportunity to boost confidence. “
Michael Wayland / CNBC
For comparison, General Motors’ adjusted profit margin was 6.1% in 2019, 7.9% in 2020, and 13.6% in the first quarter of this year.
Wells Fargo analyst Colin Langan expects Ford to reaffirm its long-term margins at the event, and will focus primarily on “future mobility themes” such as electric and autonomous vehicles and the data monetization.
Ford is considered to be behind Tesla and GM when it comes to battery supply, its future range of electric vehicles and its overall plans.
“The key to Ford’s future stock performance will be convincing investors that the automaker can become a relevant player in electric vehicles,” Deutsche Bank analyst Emmanuel Rosner said in a note.
Farley said the company plans to electrify its most iconic nameplates, which has made some, like RBC’s Spak, question whether the company will offer an electric version of its next Bronco SUV.
In February, Ford announced plans to increase its investment in electric vehicles to $ 22 billion through 2025. That included $ 10.5 billion in new investment and $ 7 billion already spent since 2016.
Analysts also want to know an expected sales target from Ford for electric vehicles. GM has announced plans to sell 1 million electric vehicles per year by 2025 as part of a $ 27 billion electric and autonomous vehicle plan through 2025. This includes the launch of 30 new electric vehicles in the world by then.
Ford last week answered questions from analysts about whether the automaker would make its own battery cells by announcing plans for a joint venture with South Korean battery maker SK Innovation.
A detailed update ahead of the planned commercial launch of Argo’s business next year would be seen as positive for Wall Street.
Argo is testing its autonomous driving technology in six US cities using Ford vehicles. Earlier this month, the company unveiled its own lidar, which many say is the key technology for bringing autonomous vehicles to market.
During the company’s first quarter earnings call last month, Farley said the company “is only scratching the surface of our customers benefiting from our fully connected vehicles.”
Langan of Wells Fargo said that while Ford has made several announcements in the weeks leading up to the financial markets day, he remains “optimistic that the event will still surprise positively, perhaps on the big data front which has received less. attention of investors. “
– CNBC Michael Bloom contributed to this report.