How the Novelis Fire and Production Delays Are Shaping Ford’s 2025 Share Price Outlook

Thinking about what to do with your Ford Motor stock? You are definitely not alone. With a share price hitting $11.76 at the last close and a return of nearly 22% so far this year, plenty of investors are watching closely to see what happens next. The mood around Ford lately has felt almost like a tightrope act: steady long-term gains and market excitement, but also fresh worries from supply chain hiccups and production updates that are out of Ford’s control.

Just in the last month, Ford’s stock has nudged up 0.7%, while the one-year return sits at 14.7%. For anyone looking further back, the five-year gain of 95.2% is enough to turn any skeptic’s head. Yet, there is no ignoring those headlines about the fire at a key aluminum supplier and temporary production halts at Ford’s plants. Those stories have made news, but so far, they have not derailed the overall momentum, reflecting a growing confidence in Ford’s ability to adapt.

On the valuation front, Ford scores a 3 out of 6 using standard undervalued checks. This is a solid showing, but not a screaming bargain at first glance. Of course, that topline number does not tell the whole story. Let us take a closer look at how Ford stacks up across various valuation approaches, and later on, I will point out a method that may give you an even sharper perspective on Ford’s true worth.

Why Ford Motor is lagging behind its peers

Approach 1: Ford Motor Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) valuation projects a company’s future cash flows and then discounts them back to today’s value. This approach aims to estimate the business’s true worth regardless of short-term market swings. This method is widely used because it focuses on the company’s ability to generate cash over time.

For Ford Motor, the DCF approach uses a 2 Stage Free Cash Flow to Equity model. At present, Ford’s last twelve months Free Cash Flow is $10.01 billion. Analysts project that annual Free Cash Flow will decrease, reaching $3.97 billion by 2035. Over the next decade, these estimates suggest Ford’s cash flow will gradually taper from $5.3 billion in 2026 to nearly $3.9 billion in later years. Estimates for years after 2027 are based on extrapolations rather than direct analyst input.

Based on these projections, the intrinsic value per share is estimated at $9.98. With Ford’s current share price at $11.76, this suggests the stock is about 17.8% above its calculated fair value by this model. According to the DCF analysis, Ford’s shares appear overvalued at present levels.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Ford Motor.

Our Discounted Cash Flow (DCF) analysis suggests Ford Motor may be overvalued by 17.8%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Ford Motor Price vs Earnings

The price-to-earnings (PE) ratio is a widely used tool for valuing profitable companies like Ford Motor because it connects a company’s market price directly to its earnings. Investors often look at the PE ratio to get a sense of how highly the market values a company's core profits, especially for established businesses with steady earnings.

What qualifies as a "fair" PE ratio largely depends on expectations for future growth and the risks tied to a business. A higher PE might be justified for companies with strong growth prospects or lower risks, while slower-growing or riskier companies typically trade at lower multiples.

Currently, Ford's PE ratio sits at 14.85x, which is lower than the auto industry average of 18.74x and below the peer average of 16.97x. On the surface, this could suggest that Ford is undervalued compared to its rivals. However, those numbers tell only part of the story.

Simply Wall St’s "Fair Ratio" is designed to go further by factoring in not just earnings, but also Ford's earnings growth, profit margins, industry, market cap, and unique risk profile. The Fair Ratio for Ford comes out to 20.55x, which is what you would expect to pay for Ford given all these considerations. This makes it a more reliable yardstick than industry averages or peer groups because those can overlook important differences between companies.

Since Ford’s current PE (14.85x) is meaningfully below the Fair Ratio (20.55x), the stock appears undervalued by this measure.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Ford Motor Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives. A Narrative is your personal investment story: it allows you to connect your own perspective about Ford Motor, such as your forecasts for future revenue, earnings, and profit margins, to a financial model, producing a fair value that reflects your unique view.

This approach transforms investing from simply crunching numbers to expressing your conviction about a company’s future, as every Narrative links Ford’s story, including what drives its success or risk, to a forecast and a calculated value. Narratives are easy to build or explore on Simply Wall St’s Community page, where millions of investors already share and compare ideas.

By using Narratives, you can decide when to buy or sell Ford by comparing your fair value against the current price. The best part is that Narratives automatically update as new news or earnings data comes in, keeping your view up to date without any extra effort.

For example, some investors believe Ford’s struggles with rising labor costs and EV competition will push fair value as low as $8.00 per share, while others expect digital revenues and successful EV platforms to drive fair value up to $16.00. This demonstrates how Narratives help you make smarter, more personalized investment decisions.

Do you think there's more to the story for Ford Motor? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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