Last Update 06 Feb 26

F: 2026 EV Reset And Partnerships Will Shape Balanced Future Prospects

Narrative Update: Ford Motor Analyst Price Target Shift

Analysts have nudged their price targets on Ford higher by a few dollars per share, reflecting updated views on slightly firmer margin expectations, a somewhat lower assumed discount rate, and a reduced future P/E, all supported by recent research highlighting Ford's evolving EV plans and outlook into 2026.

Analyst Commentary

Recent research around Ford highlights a mix of optimism and caution, with several firms revising price targets and rethinking how the company’s EV reset and 2026 setup feed into valuation and execution risk.

Bullish Takeaways

Bullish analysts are lifting price targets, with several moves clustered around Ford’s 2026 outlook. This suggests they view the updated assumptions on margins and discount rates as reasonable for current valuation work.
Some research points to Ford’s next generation EV platform as better aligned with leading manufacturing approaches. Analysts see this as a potential way to improve execution on future products and cost structure.
One upgrade to an Overweight rating, alongside a higher price target, links Ford’s EV reset and new platform planning to potential improvements in the company’s positioning by 2026 and 2027.
Hold ratings with modest target increases indicate that even less optimistic analysts acknowledge a more predictable setup into 2026. They factor this into their models with slightly higher target prices.

Bearish Takeaways

Some Hold ratings remain in place despite higher targets. This signals that certain analysts still see a balance between potential upside and execution risk rather than a clear opportunity.
Commentary around Ford’s 2026 guidance suggests it may include a degree of conservatism. Market reaction could depend heavily on the outlook for Model e losses, highlighting ongoing concerns around EV profitability.
The focus on 2026 as a more predictable year for carmakers does not remove nearer term uncertainty, and some analysts appear wary of assuming that Ford’s EV repositioning will translate smoothly into stronger financial outcomes.
Even where targets move up, references to loss outlooks and the need for clearer guidance indicate that a portion of the Street remains cautious on Ford’s ability to execute its EV plans within the timeframes they are modeling.

What's in the News

Ford is in talks with several Chinese companies, including Geely and BYD, about potential partnerships related to vehicles and hybrid-vehicle batteries, which could affect how it sources key components and addresses the China market (Reuters, WSJ).
The company has also held partnership discussions with Xiaomi and is in financing talks with First Brands alongside General Motors, pointing to active engagement with both technology and capital providers (FT).
At CES, Ford outlined plans for an AI assistant that starts in its smartphone app before moving into vehicles, alongside a next generation of BlueCruise driver assistance that targets eyes off driving capability in 2028, aligned with an upcoming US$30,000 EV (CNBC, TechCrunch).
Ford announced a shift in its Ford+ plan, redeploying capital toward a new battery energy storage business, a flexible Universal EV Platform for smaller EVs, more hybrids and extended range electric options, and adjustments to larger EV and van plans in North America and Europe, including special items totaling about US$19.5b and about US$5.5b in cash effects spread across 2025 to 2027.
In Europe, Ford expanded availability of its BlueCruise hands off, eyes on driver assistance system to additional models and markets, giving access to about 135,000 km of designated highways across 16 European countries from 2026.

Valuation Changes

Fair Value: Kept unchanged at US$13.76 per share, indicating no shift in the central valuation estimate used in this framework.
Discount Rate: Reduced slightly from 12.5% to 12.33%, which gives a bit more weight to future cash flows in the updated model.
Revenue Growth: Assumed revenue change moves from about a 1.11% decline to about a 1.10% decline, a very small adjustment in the long term growth outlook.
Net Profit Margin: Raised from roughly 2.72% to about 3.26%, reflecting a modestly higher margin assumption for future profitability.
Future P/E: Lowered from 15.91x to 13.20x, suggesting the updated framework applies a more conservative earnings multiple to Ford’s future earnings stream.

Expansion into digital services and connected vehicle technologies is driving higher-margin recurring revenues and boosting Ford's long-term profitability and earnings durability.
Streamlined manufacturing, cost controls, and a strategic EV realignment are enhancing operational efficiency, closing cost gaps, and increasing competitiveness in key markets.
Heavy reliance on legacy vehicles, trade uncertainties, and slow EV transition expose Ford to mounting cost pressures, competitive threats, and shrinking long-term profitability.

Catalysts

About Ford Motor

Develops, delivers, and services Ford trucks, sport utility vehicles, commercial vans and cars, and Lincoln luxury vehicles worldwide.What are the underlying business or industry changes driving this perspective?

Ford's ongoing transformation of its Ford Pro commercial platform-emphasizing high-margin, recurring revenues from software, telematics, and aftermarket services-continues to outperform, with paid software subscriptions up 24% year-over-year and aftermarket approaching 20% of Pro EBIT. This shift toward recurring digital revenues supports structurally higher net margins and enhances earnings durability.
Material improvements in operational efficiency-including accelerated manufacturing cost reductions and successful supplier negotiations-are driving sustainable cost savings. This cost discipline, supported by ongoing restructuring efforts, is already closing Ford's competitive cost gap and is expected to bolster margins and long-term earnings growth.
Ford is strategically realigning its electrification investments, shifting focus toward next-generation, U.S.-built EV platforms and leveraging advanced, lower-cost LFP battery technology. This positions Ford to benefit from robust EV adoption, government incentives, and reduced development costs, likely supporting future revenue growth and improved gross margins as new EVs scale.
Recent and pending changes in emissions regulations are affording Ford greater powertrain flexibility and enabling the company to adjust its product mix toward higher-demand, higher-margin ICE and hybrid vehicles without significant compliance costs. This shift unlocks a multibillion-dollar earnings opportunity over the next several years by reducing regulatory burden and costly credit purchases.
The focus on connected vehicle data, OTA software updates, and advancements in autonomous driving (BlueCruise, upcoming Level 3 capabilities) sets the stage for new, high-margin revenue streams from digital services and vehicle fleet management. This positions Ford to capture higher customer lifetime value and recurring revenues, driving top-line growth and long-term profitability.

Ford Motor Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Ford Motor's revenue will decrease by 0.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 1.7% today to 3.6% in 3 years time.
Analysts expect earnings to reach $6.6 billion (and earnings per share of $1.58) by about September 2028, up from $3.2 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $9.8 billion in earnings, and the most bearish expecting $5.4 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 9.3x on those 2028 earnings, down from 14.5x today. This future PE is lower than the current PE for the GB Auto industry at 18.6x.
Analysts expect the number of shares outstanding to grow by 0.14% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Ford Motor Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Large and persistent tariff headwinds ($2 billion estimated net impact) and ongoing global trade policy uncertainty could continue to weigh on Ford's cost structure and compress margins, particularly given the company's U.S.-centered manufacturing footprint.
Ford's mixed strategy on electrification-including postponing, canceling, or re-scoping EV programs in reaction to regulatory and market shifts-could leave it lagging behind more agile pure-play EV competitors and Chinese OEMs, risking long-term market share and revenue growth.
Ford remains highly reliant on profits from internal combustion engine (ICE) vehicles, especially trucks and large SUVs; as regulations and consumer preferences pivot more aggressively toward EV adoption, this dependence could erode margins and shrink addressable markets.
Recurring high warranty and recall costs, especially from legacy vehicles, create a lag in improving bottom-line results; while coverage costs are trending down, full normalization in recall-related outflows may take years, posing ongoing risks to net earnings and free cash flow.
Rising competitive pressures in both commercial and consumer automotive markets-including EV price competition, input cost inflation (e.g., batteries, materials), and the need for sustained high investment in autonomous/connected vehicle technology-could limit Ford's pricing power and future net margins.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $10.8 for Ford Motor based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $16.0, and the most bearish reporting a price target of just $8.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $183.9 billion, earnings will come to $6.6 billion, and it would be trading on a PE ratio of 9.3x, assuming you use a discount rate of 12.3%.
Given the current share price of $11.49, the analyst price target of $10.8 is 6.4% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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