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Ford Motor recently faced a proposed class action lawsuit in Vancouver over its 10R80 10-speed transmission, highlighting significant legal challenges. While the company recorded a flat share price move over the past month, broader market turmoil contributed to its performance. The global trade tensions, marked by new tariffs leading to a decline in major indices like the Dow and S&P 500, overshadowed individual company performance across sectors, including the auto industry. Given the market's overall decline of 9.5% during the past week, Ford's relative stability indicates resilience despite legal headwinds.
Ford Motor has 3 weaknesses (and 2 which shouldn't be ignored) we think you should know about.
Over the last 5 years, Ford's total shareholder return, including dividends, reached a commendable 126.05%. This significant growth contrasts with the company's recent underperformance against the broader U.S. auto industry over the past year. Ford boosted earnings by US$5.88 billion for 2024 as revenue rose to US$184.99 billion, maintaining strong profitability and resilience. The company also expanded its buyback program, recently repurchasing 13.7 million shares, underscoring a commitment to shareholder value.
Ford actively invested in electrification—a strategic move aligning with industry trends. Production upgrades and federal investments in EV technologies strengthened its competitive edge. Though facing litigation challenges, like the class-action lawsuit over its 10-speed transmission, Ford continues to evolve its business model, focusing on hybrid trucks and recurring revenue streams. This adaptability could sustain its trajectory, despite recent pressures and a moderate P/E ratio compared to industry peers.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.