Ford Motor Company (NYSE:F) Shares Update

Ford Motor Company shares fell over 3% before Monday's opening bell after Jefferies downgraded the automaker from "hold" to "underperform". Concerns include:

• Inventory build-up
• Strategic uncertainty in Europe
• Growing gap between warranty provisions and cash outflows

Jefferies reduced its price target for Ford to $9 from $12, citing significant de-stocking issues. Analysts noted that U.S. inventory levels reached 96 days in November.

The brokerage expressed caution over Ford's management of an $8.5 billion gap between past warranty provisions and cash disbursements since 2020, suggesting potential restructuring and warranty claims could limit available cash for shareholders.

In contrast, Jefferies maintained a "hold" rating on General Motors (GM) with a price target of $52, mentioning that GM's integration of Cruise into its ADAS may bolster near-term profits and shareholder cash transfers, though it raises discussions regarding re-rating potential.

Additionally, Jefferies pointed out that the U.S. market remains a stable environment compared to global EV policy transformations, with profits primarily among GM, Ford, Stellantis, and Toyota. However, dwindling cash generation as dealer restocking concludes may impact overall industry momentum.