P&A Providers & Administrators
MenuMENU
SearchSEARCH

Ford Motor Deserves More Respect From Investors, Bank of America Says

August 9, 2011
2 min to read


Ford Motor Co., which fell below $10 yesterday for the first time in 13 months, is not receiving the credit it deserves from investors, Bank of America Corp. said.


Ford shares, which dropped 41 percent this year through yesterday, are trading at 2.6 times earnings before interest, taxes, depreciation and amortization, compared with a historical average of 4 to 5 times earnings, Bank of America analyst John Murphy wrote in a note today. Murphy added Ford to the company’s US 1 list of stocks with a buy recommendation, according to Bloomberg.

Ad Loading...


“Even in the downside scenario of a double-dip recession, Ford’s stalwart balance sheet is substantially healthier than in 2008,” Murphy wrote. “But we believe that the market is not giving Ford’s stock credit for the company’s balance-sheet health.”


Ford had net income of $4.95 billion in the first half of the year, as fuel-efficient models like the Fiesta subcompact attracted buyers in a slowing U.S. auto market. Ford paid down debt by $2.6 billion in the second quarter, leaving it with $22 billion in automotive gross cash and $14 billion in debt.


“The recovery in U.S. demand should drive the auto stocks higher while Ford’s product cycle hits a sweet spot driving market-share gains, with a ‘fortress-like’ balance sheet,” wrote Murphy, who has a price objective on Ford stock of $26. “It should also be noted that second-quarter results were solid.”


Ford, based in Dearborn, Michigan, rose 98 cents, or 9.9 percent, to $10.91 at 4:01 p.m. in New York Stock Exchange composite trading. The shares closed yesterday at $9.93, the lowest since June 29, 2010.


The Dow Jones Industrial Average rose 429.92 points, or 4 percent, to 11,239.77. Yesterday, the Dow fell 634.76 points, or 5.6 percent, after Standard & Poor’s downgraded the U.S.’s credit rating Aug. 5 to AA+ from AAA.

Ad Loading...


“The near-term economic challenges are clear, and we see the U.S. debt ceiling law and European Central Bank bond purchase as constructive developments to stabilize the global economy,” John Stoll, a Ford spokesman, said in a statement. “We remain focused on the incoming indicators and economic fundamentals, and we are monitoring how they will affect consumer confidence.”


Ford maintained its 2011 forecast of 13 million to 13.5 million industrywide sales of vehicles, including medium- and heavy-duty trucks. “It likely will come in at the lower end,” Stoll said.

More Industry

Line of like-new vehicles in outdoor lot
Industry•by Hannah Mitchell•November 3, 2026

CPO Sales Could Take Off in the Right Conditions

A recent Cox Automotive consumer survey reveals the size of an undertapped market for the vehicle segment given affordability pressures.

Read More →
Small black toy car on top of a map.
Industry•by Lauren Lawrence•November 3, 2026

Global Consumer Trends Diverge

Price remains a top consideration for U.S. car buyers, and they are the most brand-loyal consumers to established automakers, according to a new survey.

Read More →
Two men and one woman standing in front of blue walled Chevrolet dealership entrance.
Industry•by Hannah Mitchell•October 27, 2026

Badger State Dealership Gets New Owner

The longtime southern Wisconsin store moved from one area auto group to another, keeping the business in Dairyland.

Read More →
Ad Loading...
Two hands, one handing off set of keys to the other.
Industry•by Lauren Lawrence•October 27, 2026

The Cycle of Negative Equity

Third-quarter data shows consumers still rolling over debt and stretching loan terms, raising their risk of remaining underwater.

Read More →
Orange electric vehicle charging station.
Industry•by Lauren Lawrence•October 20, 2026

Charger Network Growth Slows

Despite a projected increase in public EV chargers in 2026, charging infrastructure remains a top concern for consumers as the gap between the most and least EV-friendly places remains substantial.

Read More →
Fan of $100 bills atop a white envelope
Industry•by Hannah Mitchell•October 13, 2026

Lenders, Consumers Take on More Auto Loan Risk

September records loosened credit access the most in over a decade as buyers took advantage of the conditions to afford trading, though loan applications fell.

Read More →
Ad Loading...
Red type R Honda civic parked on road.
Industry•by Lauren Lawrence•October 13, 2026

Next-Gen Hybrids in Sight

Dealerships can expect to see revamped hybrids from Honda next year as the company rolls out a new system and model lineup.

Read More →
Dodge ram emblem on orange vehicle exterior
Industry•by Hannah Mitchell•October 6, 2026

Gem State Stores Change Hands

A larger auto group founded in the industry’s early years sold two franchises to a neighbor group that's on a growth spurt.

Read More →
Graphic of model car driving on fake road.
Industry•by Lauren Lawrence•October 6, 2026

Charging In Motion

Honda has been researching wireless in-motion charging for electric vehicles since 2025, and new technology developments have put it a step closer to a final product.

Read More →
Ad Loading...
front grill of a Ford truck with blue Ford emblem
Industry•by Lauren Lawrence•September 30, 2026

Twin Cities Stores Sell

Minnesota-based Walser Automotive Group made what it called the most significant acquisition in its history with a three-rooftop deal in Minneapolis.

Read More →