Business Analysts Believe Mustang Mach-E Can Add Value To Ford Stock And Possibly Negatively Impact Tesla’s Valuation
News broke recently that Elon Musk had surpassed Jeff Bezos as the richest person in the world. The Tesla founder was bumped up the list thanks to Tesla stock hitting $880 per share recently. As such, Tesla is the highest-valued stock amongst automotive manufacturers, by a long shot.
Just how long Tesla’s valuation can continue that upward trajectory is for those who are more financially savvy than I am to determine. But I did see a story in businessinsider.com about some Wall Street analysts who got to drive the Mustang Mach-E and what they felt it would do to Ford’s overall stock value.
As of today, Ford’s stock is trading at $9/share, which is immensely less than Tesla. From a financial aspect, it seems Ford’s stock only has one place to go but up while Tesla may have hit their ceiling.
Certainly when Ford hired Jim Farley as CEO, increasing the company’s overall stock value was a huge part of his task. One of Farley’s pet projects was the Mustang Mach-E. He’s wholeheartedly behind it.
And with the controversy over the name and the way it’s being marketed the risk could be huge, but so too, could the reward be for the Mustang Mach-E.
What Financial Analysts Think Of the Mustang Mach-E
In the story on businessinsider.com, which can be found here in its entirety, at team at investment firm JPMorgan took the Mach-E on drive and were impressed.
“Its design is unique and we believe will appeal to many buyers, particularly as relates to its Mustang-esque styling cues, including sinewy sheet metal, trademark tail lights with sequential signaling, and a rakish side profile more emblematic of a sports coupe than a utility vehicle," the team, lead by Ryan Brinkman, said in a note to clients.
Since they are not automotive experts and are investment experts they didn’t get into the merits of the Mach-E nor compared it to Tesla’s Model Y, which is the Mach-E’s main competitor.
"We do not aim to argue that one vehicle is necessarily superior to the other (many consumers will continue to prefer the Model Y's greater availability of semi-autonomous driving features and Tesla brand, while others will be attracted to the Mach-E's styling and availability of a $7,500 federal tax credit)," they said.
Mustang Mach-E Could Increase Ford’s Stock Value
At Torque News we have a team of writers who cover Tesla, so I won’t get into the nitty gritty about Tesla’s valuation. But let’s say that almost all financial experts have been puzzled and bewildered by Tesla’s meteoric climb in 2020.
All other automakers dropped or remained flat throughout 2020, due mostly to the pandemic. Ford’s stock value fell 4% in 2020. So with so much room to grow and a bullish outlook on 2021 with the launch of the 14th-generation F-150, and the Bronco Sport, plus the upcoming launch of the two and four-door Bronco and the arrival of the Mustang Mach-E, 2021 could be a monumental year for Ford Motor Company.
Investors like JPMorgan seem to feel bullish too and that’s a good thing for Farley and the other executives in Dearborn.
In the businessinsider.com story, a JPMorgan investor was quoted as saying:
"While we do not expect Ford to rival Tesla for number of battery electric vehicles sold (although Volkswagen, with a $99 billion cap, may), we do expect investors to increasingly take seriously its competitiveness in this area."
2021 Mustang Mach-E A Finalist For Utility of the Year
I reported a few weeks ago that the Mach-E was one of three finalists, along with the Genesis GV80 and the Land Rover Defender.
The winner will be announced tomorrow and we will have it covered whether the Mach-E wins or not. I still stand by my prediction that the Genesis GV80 will win, but I also wouldn’t be shocked if Mach-E pulled it off.
My colleague Marc Stern reported that the Mustang Mach-E won The Car Connection’s ‘Best Buy for 2021’ award.
Likewise, I reported that the Mach-E received Edmunds Top Rated Luxury EV
recognition. So with accolades pouring in, could the prestigious Utility of the Year be next? Stay tuned.
I wrote to some controversy and was called a Mach-E fan boy and a convert, that whether you like the Mach-E or agree with the Mustang name being used, that if you call yourself a Ford fan, you should root for it to succeed.
If the Mustang Mach-E does pull off the NAUOY award, will Ford’s stock increase? And if not, what will it take for Ford’s market valuation to increase. As one of the most recognizable manufacturing names in American history it’s a puzzling case as to why Ford’s stock continues to underwhelm while upstart Tesla skyrockets.
What do you say? Are you buying low on Ford or selling high on Tesla? Leave me your comment below.
Jimmy Dinsmore has been an automotive journalist for more than a decade and been a writer since the high school. His Driver’s Side column features new car reviews and runs in several newspapers throughout the country. He is also co-author of the book “Mustang by Design” and “Ford Trucks: A Unique Look at the Technical History of America’s Most Popular Truck”. Also, Jimmy works in the social media marketing world for a Canadian automotive training aid manufacturing company. Follow Jimmy on Facebook, Twitter, at his special Ford F-150 coverage on Twitter and LinkedIn. You can read the most of Jimmy's stories by searching Torque News Ford for daily Ford vehicle report.