Why Ford Motor (F) Stock Is Falling Today

Tickers in this article: BA F GM

NEW YORK (TheStreet) -- Ford Motor shares are down -1.6% to $15.91 in trading following reports of the retirement of its CEO and weak April sales numbers.

Ford reported that auto sales fell 0.7% from the year ago period. The company sold 211,126 vehicles, trailing both General Motors and Chrysler whose sales rose 7% and 14%, respectively.

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In separate news, the company announced that CEO Alan Mulally will be retiring at the beginning of July. The 68 year old former Boeing executive has been with Ford for the past 8 years.

Mark Fields, the chief operating officer, was officially named the new CEO.

TheStreet Ratings team rates FORD MOTOR CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FORD MOTOR CO (F) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, attractive valuation levels, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.2%. Since the same quarter one year prior, revenues slightly increased by 3.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has significantly increased by 187.25% to $315.00 million when compared to the same quarter last year. In addition, FORD MOTOR CO has also vastly surpassed the industry average cash flow growth rate of 30.33%.
  • FORD MOTOR CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, FORD MOTOR CO increased its bottom line by earning $1.75 versus $1.42 in the prior year. For the next year, the market is expecting a contraction of 22.9% in earnings ($1.35 versus $1.75).
  • You can view the full analysis from the report here: F Ratings Report
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