Bank of America Positive on Ford (NYSE: F), Upgrades Stock to ‘Buy’

Ford (NYSE: F) shares have continued its good performance on Saturday, having gained on Friday following a positive nod from Bank of America Merrill Lynch.

At the moment, F shares are trading +1.76% on the day after Bank of America moved to upgrade the equity on Friday, moving it from neutral to buy. The automaker’s stock is trading at $10.38 per share, up by $0.18 since morning trading.

On Friday, shares of the company traded at $10.33 in the afternoon and closed at $10.40 after hours. It moved $0.20 or more than 1.27% on the day.

Ford Motor shares have jumped 39.59% year-to-date, much higher than the 15.18% surge that the benchmark S&P 500 index has witnessed over the same period.

Bank of America Merrill Lynch (BAML) moved to upgrade Ford’s stock after it noted the company’s profit outlook that it termed as favorable.

In BAML’s assessment, the next few years will see the firm post results in the utility vehicle and truck spot. Ford Motors is also lining up a major restructuring process.

According to BAML analyst John Murphy, Ford will “hit escape velocity” in the second half of 2019 as the company’s ‘tough’ days begin to “fade into the rearview.”

With the firm’s position in the car industry ‘solid’, Murphy believes it’s now a “buy.”

The analyst went on to bump this year’s price target to $14 per share, up from his earlier mark of $13. With this, Murphy appears to suggest Ford’s stock will gain by about 37%.

Murphy also called the stock’s earnings per share (EPS) for 2020 and 2021, putting it as an estimated $1.30 and$0.90, respectively.

In late April, when Ford releases its first-quarter earnings report, the firm’s shares rose by over 7% in after-hours trading. And BAML says that the automaker’s earnings are more nuanced, especially its 2020 outlook due to the presence of a positive product cadence in North America and Europe.

The brokerage, however, did warn that the automaker industry is likely to run into significant headwinds in the near term as a potential economic downturn and continued trade tensions disturb global markets.