Analysts Were Uninspired by Ford’s Earnings But Remain Bullish Long Term. Here’s Why

Ford (F) shares fell Tuesday, as analysts from JPMorgan and Bank of America cut their price targets after the automaker’s underwhelming third-quarter results. 

Shares of Ford fell more than 8% Tuesday morning. The company reported on Monday that its third-quarter profits missed analysts’ expectations and trimmed its full-year outlook,  projecting full-year adjusted earnings of about $10 billion, compared with its previous estimate of $10 billion to $12 billion.

JPMorgan analysts cut their price target to $14 from $15, citing the company’s “persistently high warranty expense” giving it an overweight rating.

Bank of America lowered its price target to $19 from $20, noting lighter-than-expected revenue from Ford Blue, the company’s passenger gas-powered cars and hybrid division, but maintained a buy call to the company.

Ford Pro Division a Reason For Optimism, Notes BofA

BofA cited Ford’s “positive picture” of its recent operations, noting the automaker’s management mentioning the strength in its core truck market—and especially its Pro division, which serves commercial customers.

Third-quarter revenue at the Ford Pro division rose 13% year-over-year and above Wall Street estimates, while Ford Pro Intelligence paid software subscriptions jumped 30%.

BofA said it had kept its buy call due to “Ford’s strong near-term product cadence combined with management’s focus.”

[W]e expect better profits and progress in 2025+,” said BofA.

JPMorgan, meanwhile, said it was keeping its overweight rating on Ford due to the “deep value” afforded by its shares. The broker noted that Tesla (TSLA), while one of the few profitable battery electric vehicle (EV) makers, was expected to generate a much lower level of free cash flow this year than Ford.

Ford Shares were down 8% Tuesday.