Workflow
Is Ford's Outlook for 2025 in Limbo Amid Tariff Troubles?
FFord Motor(F) ZACKS·2025-05-06 16:25

Core Viewpoint - Ford has achieved an earnings beat in Q1 2025, but the outlook for the remainder of the year is uncertain due to significant tariff challenges and has suspended its financial guidance until more clarity is available [1] Group 1: Financial Impact of Tariffs - Ford anticipates a 2.5billionimpactfromU.S.tariffs,planningtooffset2.5 billion impact from U.S. tariffs, planning to offset 1 billion through strategic measures, leaving a 1.5billionconcernfor2025[2]−Theautomotiveindustryisfacing251.5 billion concern for 2025 [2] - The automotive industry is facing 25% tariffs on imported vehicles and auto parts that do not meet USMCA standards, which began in early April [3] - Ford expects U.S. industry sales to decline by about 500,000 units due to tariff impacts, affecting its previously projected EBIT of 7 billion to 8.5billionandfreecashflowof8.5 billion and free cash flow of 3.5 billion to 4.5billion[4]Group2:IndustryResponse−OtherautomakerslikeGeneralMotors,Harley−Davidson,andTeslaarealsofacingsimilartariffpressures,leadingtoloweredorsuspendedguidance[5]−GeneralMotorshasreducedits2025earningsforecastby4.5 billion [4] Group 2: Industry Response - Other automakers like General Motors, Harley-Davidson, and Tesla are also facing similar tariff pressures, leading to lowered or suspended guidance [5] - General Motors has reduced its 2025 earnings forecast by 4-5billion,adjustingitsEBITexpectationsto5 billion, adjusting its EBIT expectations to 10-12.5billionfrom12.5 billion from 13.7-15.7billion[6]−Harley−Davidsonexpectstariffcoststoreach15.7 billion [6] - Harley-Davidson expects tariff costs to reach 175 million this year, despite sourcing most parts domestically [7] - Tesla has moderated its growth targets due to global tariff uncertainties and has not reaffirmed its lower targets in its latest quarterly update [8] Group 3: Stock Performance and Valuation - Ford's shares have gained approximately 3% year-to-date, contrasting with a 28% decline in the industry [9] - The company trades at a forward price-to-sales ratio of 0.25, which is below the industry average, and holds a Value Score of A [11] - The Zacks Consensus Estimate indicates a 32.6% year-over-year drop in Ford's earnings for 2025 [13]