Back in 2017, it was something of a surprise to many pundits when then-President and CEO of Ford Motor Company Mark Fields wasn’t immediately succeeded by Jim Farley following Fields’
ousting retirement from Ford. A noted automotive and vintage racing enthusiast with an illustrious decades-long career in the automotive field, he was widely perceived as a much more natural choice than industry outsider Jim Hackett, who’d previously served as CEO of a Michigan-based office furniture manufacturer for 20 years.
But Hackett’s tenure at the helm, like that of Mark Fields, was relatively brief, and Farley was finally tapped to lead Ford Motor Company in October, 2020. The company’s been a rising star on the stock market pretty much ever since.
In fact, Ford just smashed through a new barrier on the stock exchange, its market capitalization – the total value of all existing shares in the company – crossing the $100 billion mark for the first time ever last week. With that, Ford has surpassed General Motors (with a current market cap of about $89 billion) and Stellantis (roughly $69 billion – nice) to become the highest valued of the Big Three US automakers. Granted, it’s still a far cry from Tesla’s absurdly inflated $1 trillion market capitalization, but the Palo Alto-based EV manufacturer has always been the lucky recipient of a good amount of market insanity.
What’s Behind The Rise?
Ford, currently priced at just over $25 per share, finds itself in this position primarily as a result of its aggressive battery-electric vehicle strategy. On May 19th, 2021 when the 2022 Ford F-150 Lightning was first revealed, Ford was selling for $12.11 per share. Two weeks later on June 3rd, the price hit $15.99. In the time since, it’s emerged that Ford has seen such rampant success with the Mustang Mach-E that it’s decided to devote its entire Cuautitlan plant in Mexico to the electric crossover, and has announced its plans to double Ford F-150 Lightning production – not once, but twice – after amassing some 200,000 or so reservations.
Granted, not all on Wall Street have bought into the Ford EV frenzy, and many analysts feel that Ford’s market cap is inflated. According to a FactSet compilation from 22 Wall Street analysts, Ford is currently viewed as “overweight,” CNBC reports. In a note to investors, Morgan Stanley analyst Adam Jonas said that “at this juncture, we believe the risks facing Ford and the sector are rising faster than the opportunity,” citing strong EV competition, production scaling challenges, and the typically cyclical nature of the automotive sector.