Trading Ford’s 66% Surge on Growing EV Market Share
Electric vehicle (EV) stocks were once the biggest theme for tech investors. As the market has rebalanced towards a world of higher interest rates, some EV stocks are now trading at historically low prices.
While many EV investors are focused on Tesla, some research suggests that there are other automakers that could overtake Tesla's EV market share in the next few years.
Ford is one of the companies on this list. Learn more about Ford's EV prospects and how to act on them below.
Every trade involves high risk and you can lose more than your risk in the trade. Never invest more than you can afford to lose because some trades will lose and some trades will win. Start small to understand your own risk tolerance, or practice on a demo account. Build your knowledge first before investing.
Why trade? Ford stock?
Research from leading auto analysts at Bank of America says Tesla will lose its share of the EV market by 2025. This will benefit incumbent automakers like General Motors and Ford, which have a wider selection of new electric vehicles and a much larger distribution network.
Ford is expected to have about 15% market share by 2025, up from about 6% today. The growth in demand for electric vehicles is undeniable, as evidenced by the LMC Automotive forecast below.
SHAI and Baikce: LMC Automotive via CNBC
Bank of America research also suggests that Elon Musk may have missed an opportunity to overtake the traditional auto industry due to slow product launches with limited reach.
Research also shows that Ford's stock has historically been relatively inexpensive compared to other markets using current and future price-to-earnings (P/E) ratios. While Ford tops the list for using this metric, that's only because the recent drop in share price has rebalanced the stock into some price-to-earnings more in line with traditional automakers.
However, analysts at Citigroup believe that the underlying story is moving in the right direction for Ford with the upcoming launch of electric vehicles. They also stressed that stocks could respond well to favorable cyclical developments in the auto sector if the upcoming data calms investors.
wading stock forecasts – what dotdia analysts have to say?
There are currently 7 buy, 9 hold, and 1 sell ratings for the stock, according to analysts polled by TipRanks over the past 3 months for Ford stock forecasts. The highest price level for Ford stock forecast is $32.00 and the lowest price target is $12.00.
The median target price for Ford's stock forecast is $18.81, up more than 66% from current levels at the time of writing.
Exemplary trading idea for that wading stock price
An example of a trading idea for a Ford stock forecast might look like this:
Buy the stock when it breaks above $12.50 to account for current market volatility.
Target just below the analyst's average price target of $18.00.
Keep your risk low with a maximum of 5% of your total account.
Timeline = 1-6 months
If you buy 10 shares of Ford:
If target is met = $55.00 potential profit ($18.00 – $12.50 * 10 shares).
It is wise to keep in mind that stock prices are unlikely to rise in a linear fashion and could actually drop further before bouncing higher, especially given the recent sell-off in global stock markets.
Therefore, pay attention to good risk management, which is one of the most important aspects of successful trading. You should always be aware of how big your potential loss is in trading and the risks involved.
Another factor to consider is the commission as it can affect your profits. The Admirals Invest.MT5 account allows you to buy US stocks starting at $0.02 per share. This means that buying 10 shares of Ford will result in a commission of $0.20 ($0.02 * 10 shares).
There is a low minimum transaction fee of $1. So the example trading idea above will generate a total commission of just $1!