Analyst upgrade: finding faith in ford?
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Ford Motor doesn’t exactly inspire confidence in investors these days. The U.S. auto industry on the whole has been lagging behind stronger Japanese competitors like Toyota Motor and Honda
Motor. But Morgan Stanley analyst Jonathan Steinmetz upgraded Ford to a “buy” today and says shares will jump 32% by the end of 2007. From whence comes such faith? Steinmetz sees “signs of
stability” at the company in new CEO Alan Mulally and the liquidity received through debt financing. He’s also predicting $12 billion in cost cuts – Ford only has $4 billion planned – coming
out of R&D, purchasing, employment and advertising. If Ford can cut costs and manufacture a strong car that consumers are willing to pay for in the next few years, Steinmetz thinks the
share price could double by 2010.