Is Ford Stock Fairly Priced After 28.6% Jump and New EV Partnerships in 2025?

• Wondering if Ford Motor stock is really a bargain right now? You're not alone, as questions about its true value keep popping up among investors looking for long-term opportunities.
• Shares have climbed 28.6% year-to-date and 23.4% over the last twelve months. The past week and month have seen slight pullbacks of -6.6% and -1.2% respectively.
• Recent headlines have spotlighted Ford's ongoing electric vehicle initiatives and partnerships, as well as its bold moves in global markets. These news developments are adding extra energy to discussions around Ford's growth prospects and the risks of staying traditional, fueling some of the latest shifts in its stock price.
• Ford's valuation score currently sits at 3 out of 6. This reflects three checks out of six where the stock appears undervalued. We'll dig into what that means for investors using different valuation lenses, and at the end, reveal one often-overlooked way to get a more complete picture of Ford's worth.

Find out why Ford Motor's 23.4% return over the last year is lagging behind its peers.

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

The Discounted Cash Flow (DCF) model estimates the value of Ford Motor by projecting its future cash flows and discounting them back to today's value. This provides an informed view of what the company might truly be worth based on its future cash generation potential.

Ford's current Free Cash Flow (FCF) stands at $11.75 Billion, with projections suggesting significant fluctuations in annual FCF over the next decade. While analysts expect FCF to reach about $7.31 Billion by 2027, further out-year projections rely on Simply Wall St's extrapolations, rather than direct analyst estimates. Based on these extended forecasts, Ford's FCF is estimated to gradually decline and stabilize around $4.82 Billion by 2035.

The resulting intrinsic value for Ford shares from this DCF analysis is $11.69. This price reflects a 6.2% overvaluation compared to recent market trading levels. Although Ford does not appear deeply mispriced, current valuations imply that upside is relatively limited unless cash flow trajectories or investor sentiment change meaningfully.

Result: ABOUT RIGHT

Ford Motor is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

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

Approach 2: Ford Motor Price vs Earnings

For profitable companies like Ford Motor, the Price-to-Earnings (PE) ratio is a widely used and effective valuation tool. It reflects how much investors are willing to pay for each dollar of a company's earnings, providing a clear window into market expectations about future growth and profitability.

Generally, companies with higher expected growth rates or lower risk can justify higher PE ratios. In contrast, lower growth or greater uncertainty typically warrants a lower multiple. This makes context critical when comparing PE ratios across companies or industries.

Currently, Ford trades at a PE ratio of 10.5x, which stands notably below both the auto industry average of 17.8x and the peer group average of 21x. On the surface, this suggests Ford is priced more conservatively than many of its competitors.

However, rather than relying solely on broad benchmarks, Simply Wall St’s proprietary "Fair Ratio" provides a more tailored view. The Fair Ratio for Ford is 17.7x and factors in unique aspects such as Ford’s earnings growth prospects, industry trends, profit margins, company size, and specific risks. By blending these elements, the Fair Ratio offers a truer sense of what Ford’s multiple should be, instead of assuming it should always match peers or the industry at large.

Given that Ford’s actual PE (10.5x) is meaningfully below its Fair Ratio of 17.7x, the stock currently appears undervalued using this approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1423 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's introduce you to Narratives.

Narratives are a practical way for investors to connect a company's story to concrete financial forecasts. They blend your perspective on the business with your expectations for its future revenue, earnings, and margins to determine your fair value.

On Simply Wall St’s Community page, Narratives make it easy for anyone to craft and share their own outlook for Ford Motor, or see how millions of other investors are framing the same stock. Each Narrative gives context to the numbers and helps you compare your estimate of Ford's fair value with its current price, putting you in the driver’s seat for buy or sell decisions.

Unlike static analysis, Narratives update as news breaks or earnings roll in, so your view evolves in real time alongside Ford's journey.

For example, one investor may build a bullish Narrative, projecting Ford's earnings to climb toward $9.8 billion and justifying a fair value near $16.00 per share. Another may expect tougher EV challenges and more modest earnings of $5.4 billion, supporting a more conservative fair value closer to $8.00.

Do you think there's more to the story for Ford Motor? Head over to our Community to see what others are saying!

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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