Ford Q4 Earnings Ahead: Is F Stock a Buy Before Results?

Core Viewpoint - Ford is expected to report its fourth-quarter 2025 results, with an EPS estimate of 17 cents and automotive revenues of $41.2 billion, reflecting a year-over-year decline in both metrics [1][2]. Earnings Estimates - The EPS estimate for the upcoming quarter has increased by 10 cents over the past month, but it still represents a 56% decline year-over-year. Revenue estimates indicate an 8% decrease compared to the same quarter last year [2]. - For the full year 2025, automotive revenues are projected at $173 billion, showing a modest 1% increase year-over-year, while the EPS consensus indicates a 39% contraction. However, the EPS for 2026 is expected to grow by 35.2% from 2025 levels [3]. Performance Indicators - Ford has consistently surpassed earnings estimates in the past four quarters, and current indicators suggest a strong likelihood of an earnings beat this time, supported by an Earnings ESP of +16.06% and a Zacks Rank of 1 [4]. - The most accurate EPS estimate for the current quarter is 19 cents, while the Zacks Consensus Estimate is 17 cents [5]. Sales and Market Dynamics - Ford's overall sales rose by 2.7% in Q4 2025, totaling over 545,200 vehicles, with hybrid sales increasing by 17.6% year-over-year [8]. - The company faces challenges in its EV segment, with a significant drop in EV sales exceeding 50% due to the withdrawal of the federal EV tax credit, particularly affecting F-150 Lightning volumes [6][7]. Strategic Initiatives - Ford anticipates $19.5 billion in special charges related to restructuring its U.S. EV strategy, with $5.5 billion impacting cash flows through 2026 and 2027 [7]. - The Ford Pro unit is expected to contribute positively, with projected revenues of approximately $15 billion and EBIT of $1.4 billion, driven by rising paid software subscriptions [9]. Market Position and Valuation - Over the past six months, Ford's shares have increased by 24%, outperforming the industry and Tesla, while underperforming General Motors [10]. - The company is currently trading at a forward sales multiple of 0.32, indicating it may be undervalued compared to the industry [13]. Future Growth Prospects - Ford is shifting its focus towards hybrids and gas-powered vehicles in response to slowing EV adoption, which is expected to help maintain margins and volume [15]. - The company is also exploring future growth avenues, including a battery energy storage systems business and advancements in autonomous driving technology [18].