Ford Motor Company, together with its subsidiaries, designs, manufactures, markets, and services automobiles in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. More info.
The calculations below outline how an intrinsic value for Ford Motor is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$3,948.28||$5,073.10||$4,826.18||$4,964.26||$5,106.28|
|Source||Analyst x5||Analyst x6||Analyst x1||Extrapolated @ (2.86%)||Extrapolated @ (2.86%)|
Discounted (@ 17%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $5,106 × (1 + 2.5%) ÷ (16.96% – 2.5%)
Terminal value based on the Perpetuity Method where growth (g) = 2.5%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($31,585 / 3,915)
Value per share:
Current discount (share price of $12.66): -57%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 16.96% = 2.47% + (1.924 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
1.924 = 0.637 (1 + (1- 30%) (288.48%))
Levered Beta used in calculation = 1.924
Are Ford Motor's annual earnings growth expected to exceed 3.6% over the next 3 years?
Mr. Mark Fields has been the Chief Executive Officer and President at Ford Motor Co. since July 1, 2014. Mr. Fields served as the Chief Operating Officer of Ford Motor Co., from December 1, 2012 to July 1, 2014. In this role, he was responsible for overseeing Ford’s fastest global manufacturing expansion in 50 years and managing the most aggressive global product introduction schedule in its history. He served as an Executive Vice President and President of The Americas of Ford Motor Co., since October 1, 2005. In this role, he led the development, manufacturing, marketing and sales of Ford and Lincoln vehicles in the United States, Canada, Mexico and South America and was responsible for the transformation of the company’s North America operations and record profitability. He served as Head of the North American Automobile Operations of Ford Motor Co. since September 2005. From 2000 to 2002, Mr. Fields served as the President and Chief Executive Officer of Mazda Motor Corporation, leading it through a period of significant transformation. Prior to this, he held a number of positions in both North America and South America, including managing director, Ford Argentina. He served as an Executive Vice President of Ford Europe since October 2005. He served as Executive Vice President of Premier Automotive Group at Ford Motor Co. since April 2004, where he led all activities for Ford’s premium vehicle business group and for Ford brand vehicles manufactured and sold in European countries. Prior to that, he served as Chairman and Chief Executive Officer of Premier Automotive Group. He served as Group Vice President of Premier Automotive Group at Ford Motor Co. from July 2002 to April 2004. He joined Ford Motor in July 1989. He has been a Director of Ford Motor Co. since July 1, 2014. He has been a Director of International Business Machines Corporation since March 1, 2016. He is Chair of the US-China Business Council. He was named a Global Leader of Tomorrow by the World Economic Forum in 2000 and CNBC Asia Business Leader – Innovator of the Year in 2001. Mr. Fields holds a Bachelor's degree in Economics from Rutgers University and an MBA from Harvard Graduate School of Business.
Average tenure of the Ford Motor management team:
Average tenure of the Ford Motor board of directors:
Ford Motor Company, together with its subsidiaries, designs, manufactures, markets, and services automobiles in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. The company’s Automotive segment develops, manufactures, distributes, and services cars, trucks, SUVs, and electrified vehicles under the Ford name; and luxury vehicles under the Lincoln name, as well as service parts and accessories. This segment markets its products through distributors and dealers, as well as through dealerships to fleet customers, including commercial fleet customers, daily rental car companies, and governments. Its Financial Services segment offers various automotive financing products to and through automotive dealers. Its financing products comprise retail installment sale contracts for new and used vehicles; and direct financing leases for new vehicles to retail and commercial customers, such as leasing companies, government entities, daily rental car companies, and fleet customers. This segment also offers wholesale loans to dealers to finance the purchase of vehicle inventory; and loans to dealers to finance working capital and improvement of dealership facilities, purchase dealership real estate, and other dealer vehicle programs. The company was founded in 1903 and is based in Dearborn, Michigan.
|Name:||Ford Motor Company|
|Market Cap:||$49,559 million|
One American Road, Dearborn, 48126, United States
|Sector:||Automobiles and Components|