UBS Just Issued a Critical Warning on Ford (F) Stock

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Ford (NYSE:F) is falling today on news of a negative Wall Street projection. The legacy automaker hasn’t seen much growth for the past year, and UBS doesn’t see that changing in 2024. The investment bank has released an outlook suggesting that F stock faces significant obstacles. Analyst Joseph Spak maintains a “hold” rating and thinks Ford is facing a more difficult road than many other automakers, citing the need for improvements before it can rebound. He isn’t the only expert with a negative outlook on F stock. Seven other analysts currently rate it as a hold, while only five see it as a buy.

Does this mean that Ford is a stock to count out, even if the electric vehicle (EV) market rebounds in the coming months? Let’s take a closer look at Spak’s prediction and asses what the road ahead may look like for this automaker.

What’s Happening With F Stock

Despite catching some late after-trading momentum today, F stock remains in the red. As of this writing, it is down almost 2% for the day, continuing a week of steady declines. This volatility is in keeping with most of the stock’s performance over the past six months, as labor negotiations and an unfriendly EV market have pushed it down.

What is Spak’s take on F stock? The analyst states that while his team likes the vision of Ford CEO Jim Farley, they think it “could take a number of years for the benefits of those plans to be realized.” His overall outlook on the company can be attributed to several factors that he sees as growth-impeding obstacles, though. As TipRanks reports:

“Spak sees challenges ahead that could impede progress. For one, compared to the company’s plans, the new UAW labor contract was meaningfully above (~2x) its expectations. “Ford is looking to tackle that headwind and take cost out, but we believe the surprise vs. base plan means identifying some savings initiatives may only be getting started and cost out could take time to realize,” Spak opined”

Granted, things haven’t been all bad for Ford over the past few quarters. The company recently reported higher fourth-quarter sales growth than Tesla (NASDAQ:TSLA), but that statistic failed to do much for F stock. However, Ford is already facing increasing competition, and some of its rivals may have better growth prospects. General Motors (NYSE:GM) boasts favorability with Wall Street. It currently holds a moderate buy consensus, with 15 analysts rating it as a buy. On the other hand, Ford is still only a hold consensus, and Spaks’ predictions help highlight why.

On the publication date, Samuel O’Brient did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Samuel O’Brient is a Reporter for InvestorPlace, where his work focuses primarily on financial markets, global economic trends, and public policy. O’Brient writes a weekly column on recent political news that investors should be following.

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