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)||$3,671.40||$4,139.05||$3,428.00||$3,890.00||$3,979.19|
|Source||Analyst x4||Analyst x4||Analyst x2||Analyst x1||Extrapolated @ (2.29%)|
Discounted (@ 17.7%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $3,979 × (1 + 2.3%) ÷ (17.67% – 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 ($23,773 / 3,972)
Value per share:
Current discount (share price of $11.71): -96%
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 = 17.67% = 2.33% + (2 * 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))
2.141 = 0.669 (1 + (1- 30%) (313.94%))
Levered Beta used in calculation = 2
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. He serves as Vice Chairman of the Board at The Detroit Lions, Inc. and Business Leaders for Michigan. He has been a Director of Ford Motor Co., since 1988. He serves as a Director of United States-Mexico Chamber of Commerce. He serves as a Trustee of The Henry Ford. He is a Honorary Trustee of Henry Ford Health System, Inc. and served as its Trustee since January 1, 2012. He served as an Independent Director of eBay Inc. from July 27, 2005 to May 1, 2015. Mr. Ford holds a B.A. degree from Princeton University and a master of science degree in management from the Massachusetts Institute of Technology MIT.
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:||$46,509 million|
One American Road, Dearborn, 48126, United States
|Sector:||Automobiles and Components|