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)||$4,926.83||$5,069.56||$3,293.50||$3,701.00||$3,802.97|
|Source||Analyst x6||Analyst x5||Analyst x2||Analyst x1||Extrapolated @ (2.76%)|
Discounted (@ 17.6%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $3,803 × (1 + 2.3%) ÷ (17.56% – 2.3%)
Terminal value based on the Perpetuity Method where growth (g) = 2.3%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($24,904 / 3,989)
Value per share:
Current discount (share price of $11.27): -81%
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 = 17.56% = 2.33% + (1.985 * 7.67%)
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))
1.985 = 0.607 (1 + (1- 30%) (324.71%))
Levered Beta used in calculation = 1.985
Are Ford Motor's annual earnings growth expected to exceed 3.4% over the next 3 years?
Mr. William Clay Ford, Jr., also known as Bill, is a Co-Founder and Partner of Fontinalis Partners, LLC. Mr. Ford has been Executive Chairman of Ford Motor Company since January 01, 1999. Mr. Ford served as the Chief Executive Officer at Ford Motor Company from October 30, 2001 to September 2006 and served as its President and Chief Operating Officer since July 13, 2006. During his tenure as Chief Executive Officer, he took Ford from a $5.5 billion loss to three straight years of profitability. He served as Vice President of Commercial Truck Vehicle Center at Ford Motor Co. from 1994 to 1995. In 2000, under his leadership, FMC published its first corporate citizenship report outlining the economic, environmental and social impact of company products and operations around the world. In 2004, he led Ford Motor to restore the Ford Rouge Center and transformed it into a model of lean, flexible and environmentally sensitive manufacturing, saving millions of dollars in energy and other costs. He championed the Ford Escape Hybrid and has led efforts to double Ford Motor’s investments in wireless connected intelligent vehicles. Mr. Ford has been the Executive Chairman of Ford Motor Company since September 2006 and served as its Chairman since January 01, 1999 until September 2006. He was elected as Chairman and Managing Director of Ford Switzerland in 1987. As head of Business Strategy for the Ford Automotive Group in 1990, Mr. Ford helped develop guidelines for establishing low-volume manufacturing plants in emerging markets. Mr. Ford joined Ford Motor Company in 1979 as a product planning analyst. He subsequently held a variety of positions in manufacturing, sales, marketing, product development and finance. During the breakthrough 1982 Ford-United Auto Workers labor talks, which launched the employee involvement movement that revolutionized the industry, he served on Ford’s National Bargaining Team. After being appointed as General Manager of Climate Control Division in 1992, he led a profit turnaround and a major improvement in product quality. He also established Ford’s first wildlife habitat at a plant location and the first automotive plant in the world to use 25 percent post-consumer materials in all of its plastic parts. While he was general manager the division won the President’s Commission on Environmental Quality Award. Mr. Ford served as Chairman of the Board of Trustees at The Henry Ford and serves as its Trustee. He serves as Vice Chairman of The Detroit Lions, Inc. and he led efforts to build a new, environmentally friendly stadium in Detroit. He has been a Director of Ford Motor Co., since 1988. He is a Honorary Trustee of Henry Ford Health System, Inc. Mr. Ford served as a Trustee of Henry Ford Health System, Inc. since January 1, 2012. He served as an Independent Director of eBay Inc. from July 27, 2005 to May 1, 2015. Mr. Ford serves as the Chairman of the Board at Greenfield Village and the Detroit Economic Club. He serves as Vice Chairman of Business Leaders for Michigan. Mr. Ford serves as Vice Chairman of Detroit Renaissance Foundation and a Trustee of Princeton University. He serves as a Director of United States-Mexico Chamber of Commerce. He is a lifelong futurist on urban mobility and the environment. Mr. Ford was inducted into the Irish America Hall of Fame in 2011. In 1983 he began a 12-month course of study as an Alfred P. Sloan fellow at the Massachusetts Institute of Technology. He holds a bachelor of arts degree from Princeton University, a master of science degree in management from Massachusetts Institute of Technology (MIT), an honorary Doctor of Environmental Sciences and Engineering degree from Koc University, an honorary doctor of laws degree from the University of Michigan and an honorary doctor of humane letters degree from Bradley University.
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:||$44,957 million|
One American Road, Dearborn, 48126, United States
|Sector:||Automobiles and Components|