It’s been another week, and Ford’s strong earnings leave some analysts unconvinced. Ferrari stock gets a downgrade from Barclays while Deutsche Bank weighs in on the luxury automaker,r and Toyota gets a positive outlook from Macquarie.
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On Wednesday, February 5, Dearborn-based automaker Ford (F) announced pretty stellar Q4 2024 and full-year 2024 earnings results.
In Q4, the Blue Oval reported revenue of $48.2 billion, a net income of $1.8 billion and an adjusted EBIT of $2.1 billion. For the whole year of 2024, Ford reported revue topping $185 billion, a net income of $5.9 billion and an adjusted EBIT of $10.2 billion.
Ford’s number crunchers forecast that the automaker will take him an adjusted EBIT between $7-8.5 billion.
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“Ford is becoming a fundamentally stronger company. We finished 2024 with a solid fourth quarter, capping the highest revenue year in Ford’s history,” Ford President and CEO Jim Farley said in a statement. “Our product portfolio offers the broadest powertrain choice. And Ford Pro, with its mid-teen margins, leading market position, and growing service and repair revenue, provides unique advantages for continued growth.”
However, while Ford’s core Blue division continues to be in the black, Ford’s Model E electric vehicle division posted yet another loss in Q4 2024. EBIT for the quarter saw a loss of about $1.39 billion, contributing to a total EBIT loss topping $5 billion for the whole year.
Related: Ford CEO sends hard-nosed message to rivals
Though Ford anticipates further losses with its EV division, one thing out of its control is the policy guidance of the new Trump administration. During the earnings call, CEO Jim Farley said that any imposed tariffs would significantly impact U.S. industries.
“There is no question that tariffs at 25% level from Canada and Mexico, if they’re protracted, would have a huge impact on our industry with billions of dollars of industry profits wiped out and adverse effect on the U.S. jobs, as well as the entire value system in our industry,” Farley said. “Tariffs would also mean higher prices for customers.”
Tariffs affecting imports from Mexico and Canada have been delayed pending a 30-day grace period where administration officials will conduct talks and negotiations with our northern and southern neighbors, however in response to a question about tariffs from Goldman Sachs analyst Mark Delaney, Farley noted that the company would be in “good shape” where the month-long tariff delay didn’t pan out.
However, he took the opportunity to call out his biggest auto rivals, noting they had much less tariff exposure despite importing many cars into U.S. ports every year.
“What doesn’t make sense to me is why are we having this conversation while Hyundai, Kia is importing 600,000 units into the U.S. with no incremental tariff. And why is Toyota able to import a half a million vehicles in the U.S. with no incremental tariffs. I mean, there are millions of vehicles coming into our country that are not being applied to these,” Farley said.
“So if we’re going to have a tariff policy that lasts for a month or whatever it’s going to be years, it better be comprehensive for our industry. We can’t just cherry-pick one place or the other because this is a bonanza for our import competitors.”
Following Ford’s earnings announcement, a number of analysts lowered their ratings and/or their price targets on Ford stock. JP Morgan lowered its price target from $14 to $13, Wells Fargo cut their price target on Ford stock from $9.00 to $8.00 and set an “underweight” rating on the stock, while RBC cut its price target from $10 to $9 and set a “sector perform” rating on the stock.
In a note published on Thursday, Feb. 6, Barclays’ Dan Levy lowered the firm’s price target on Ford stock from $11 to 10 and kept an Equal Weight rating on its shares. He reasons that while Ford managed to meet the low expectations it had for 2024, more questions and concerns emerged as it entered 2025.
Levy said that 2025 is a “show me” year for Ford when it comes to cost and inventory management, as 2024 was a missed opportunity for Ford, as cost headwinds eroded investor confidence and offset prices much stronger than anticipated.
More than you can afford, pal, Ferrari.
Tesla may be an auto-related stock that many are keeping on their radar, especially as Elon Musk’s political moves and antics online and in real life have garnered a lot of attention. Still, Bank of America analysts led by John Murphy called legendary luxury sports car maker Ferrari a top stock in its US Autos 2025 Year Ahead overview on January 14.
The report called the prancing horse a “unique asset with significant intangible brand value and a true luxury status,” noting that the brand’s high price point and exclusivity are the main drivers behind continued growth.
“We believe the company’s balanced strategy of restrained volume growth, steady price increases, and new model introductions over our forecast period should drive strong consistent revenue and earnings growth.”
Related: Sorry Elon Musk, Bank of America says this electrifying lucury automaker is top pick
On February 4, Ferrari (RACE) revealed its full-year 2024 results. Its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) grew well past its estimate of €2.5 billion, reaching €2.56 billion in 2024.
In 2024, the prancing horse sold 13,752 vehicles, a 0.7% year-over-year increase. According to Ferrari, the demand was driven by the Ferrari Purosangue SUV, the Roma Spider, and the 296 GTS.
They predict that EBITDA will rise to at least €2.68 billion ($2.77 billion) in 2025, supported by strong demand for their product and healthy revenue from optional extras and personal touches.
“Quality of revenues over volumes: I believe this best explains our outstanding financial results in 2024, thanks to a strong product mix and a growing demand for personalizations. On these solid foundations, we expect further robust growth in 2025, that will allow us to reach one year in advance the high-end of most of our profitability targets for 2026” Ferrari CEO Benedetto Vigna said in a press release.
Analysts at Barclays are not convinced. In a note published on February 5, it downgraded Ferrari stock from Overweight to an Equal Weight rating but kept its €485 price target.
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Additionally, in its initial coverage of Ferrari stock, Deutsche Bank analysts used the prancing horse’s pricing power and a multiple-year backlog of orders for its initial Hold rating and a price target of €430. However, they raised concerns about the brand’s valuation and its place amid the auto industry’s transition to an all-electric future.
Despite Ferrari’s financials being “in a league of their own,” the firm describes 2025 as “a transition year. ” The phase-out of the Daytona SP3 creates a temporary gap in its highest-margin segments until deliveries of the ultra limited-edition F80 begin in Q4 2025.
But while Ferrari has its boots deep in gas-powered cars and hybrids, Deutsche analysts warn that the prancing horse faces a challenge once the EV era comes into full swing.
Ferrari CEO Benedetto Vigna said that it will reveal its EV during its Capital Markets Day on October 9, 2025 in Maranello.
“We consider this especially for Ferrari a challenge, whether the company is able to keep its mojo into the all-electric era,” Deutsche analysts wrote.
Macquarie: A Better Tomorrow for Toyota
As a lifelong car enthusiast, I could remember when almost every “enthusiast” worth their salt had an opinion on the Toyota Prius.
Much like how many motor-oil-blooded enthusiasts and politically conservative people express their disdain for electric vehicles these days, I can remember that Toyota’s fuel-efficient little hatchback was the automotive laughingstock.
However, they didn’t know it was going to be the future.
In today’s EV-centric automotive landscape, Toyota chairman Akio Toyoda has been a longtime skeptic of EV adoption, as he argued that there are multiple ways to tackle the threat of carbon emissions without sacrificing people’s mobility.
In a statement at a Toyota company event in January 2024, the Chairman argued that EVs “come as a set with infrastructure,” arguing that many of its customers live in parts of the world with little to access to electricity.
“No matter how much progress BEVs make, I think they will still only have a 30 % market share,” said Toyoda. “Then, the remaining 70% will be HEVs [hybrid-electric vehicles], FCEVs [fuel cell electric vehicles], and hydrogen engines. And I think [gas] engine cars will definitely remain.”
“I think this is something that customers and the market will decide, not regulatory values or political power.”
Related: Toyota funds climate-denying Republicans, despite its ‘green’ image
During the company’s quarterly earnings announcement on February 5, Toyota CFO Yoichi Miyazaki announced that it is ramping up its electrification plans in the U.S., as its North Carolina factory will begin to make batteries for hybrids, plug-in hybrids and full-electric vehicles built in the States beginning in April.
“Demand for hybrid vehicles is quite strong in the United States,” Miyazaki said. “Therefore we will solidify our production by producing batteries for hybrid first of all, but then we will add batteries for BEVs, and we’ll be ready to do the ramp ups quickly.”
In a note on February 5, Macquarie analysts cited Toyota’s strong hybrid sales in upgrading its stock from Neutral to Outperform, as well as a potential shift to Toyota’s involvement in autonomous driving and software-defined vehicles (SDVs).
Nvidia CEO Jensen Huang recently announced a new partnership with Toyota during its keynote at CES.
“This was the first time the market heard about its upcoming software-defined vehicle,” Macquarie said, suggesting Toyota may be moving towards developing software-defined vehicles, enabling more feature updates and over the air (OTA) updates and fixes.
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