Recent pullback is buying opportunity, Goldman Sachs analysts say
Ford Motor Co. shares may soon reap the benefits of the car maker’s restructuring in Europe, an effort that has been so far “underappreciated” by markets.
That’s from analysts at Goldman Sachs in a note this week, who added they “continue to see upside to Ford shares and believe near-term catalysts from announced restructuring actions can help crystallize that upside.”
Ford F, -0.80% shares fell nearly 1% Friday, poised to end the week with 2% gains. The stock is up nearly 5% this month, but that comes after a 9% decrease for May.
Ford’s operating margins in Europe could improve on average about 4%, and this level of earnings “is well above Street expectations for the region over the long-term — which continue to call for losses through 2021,” the Goldman analysts, led by David Tamberrino, said.
The analysts also raised their 12-month price target on Ford shares to $13, which, when a 6% dividend yield is included, would translate into a 38% total return potential to the stock, they said.
The recent share pullback is “an attractive entry point,” the analysts said, reiterating their buy rating on the stock.
Ford last month said it was planning a new wave of layoffs.
Ford shares have gained 30% this year, compared with gains of 15% and 12% for the S&P 500 SPX, -0.16% nd the Dow Jones Industrial Average. DJIA, -0.07%