Heading into 2025, Ford Motor Co. (F, Financial) is under pressure to make significant changes to keep its market dominance and safeguard free cash flow, says Bernstein analyst Daniel Roeska. To remain competitive, Roeska underlined in a recent study the need for cost restructuring in Ford Blue, higher incentives on its F-150 range, and improvements to its electric vehicle (EV) strategy.
Roeska lowered Ford's shares to Market-Perform from Outperform and dropped his 2025 earnings projection by 5%, therefore establishing a free cash flow objective of $4.1 billion, a 20% below current consensus. Citing a slowing down across sectors and limited development with the Model e platform, he expects a 17% year-over-year reduction in Ford's profits before interest and taxes (EBIT) in the first half of 2025.
Roeska said, "Ford will need to defend its F-150 in the U.S. market by increasing discounts to sustain market share, given weak consumer sentiment and stronger pricing from competitors." Ford has internal problems as well as more general market conditions, Roeska pointed out, calling for changes in commercial operations, warranty costs, and EV strategy.
