Is Ford Stock a Millionaire Maker?

Core Viewpoint - There has been a resurgence of investor interest in automakers due to President Trump's indication that automotive tariffs may not be as severe as initially feared, but Ford continues to face significant challenges and is not a strong investment opportunity at this time [1][2]. Group 1: Tariff Impact - The Trump administration clarified that automotive tariffs would not be stacked, allowing for potential rebates on some tariffs for the first two years [4]. - Ford has pulled its full-year guidance for 2025, anticipating a $1.5 billion cost from tariffs this year, despite efforts to mitigate the impact [5]. - Ford's previous guidance projected about $8 billion in EBIT for the full year, but the company reported only $1 billion in EBIT for the first quarter, indicating a significant shortfall [6]. Group 2: Market Sentiment - Consumer sentiment is at its lowest in three years, with concerns about the economy and expectations of rising inflation, which could affect vehicle sales [9]. - The average transaction cost for a new vehicle is approximately $48,700, and tariffs could further increase prices, leading consumers to save rather than spend on new cars [10]. Group 3: Competitive Position - Ford's stock is relatively cheap with a P/E ratio of 8.6, compared to the S&P 500's P/E ratio of 28, and it faces a lower tariff impact than General Motors, which expects a $5 billion impact [11]. - However, the automotive market is fraught with uncertainty, and Ford's sales are projected to decline by 2.4% this year, with only a 1.5% increase expected in 2026 [12].