What Do Investors Need To Know About Ford Motor Company's (NYSE:F) Growth?

Looking at Ford Motor Company's (NYSE:F) earnings update in December 2017, it seems that analyst forecasts are fairly pessimistic, as a -16.93% fall in profits is expected in the upcoming year. However, this pessimism is not unsubstantiated given the negative past 5-year average earnings growth of -15.86%. Presently, with earnings at $7,602.0M, we should see this fall to $6,314.9M by 2019. Below is a brief commentary on the longer term outlook the market has for Ford Motor. Readers that are interested in understanding the company beyond these figures should research its fundamentals here. See our latest analysis for Ford Motor

Exciting times ahead?

The longer term expectations from the 20 analysts of F is tilted towards the negative sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

From the current net income level of $7,602.0M and the final forecast of $6,502.5M by 2021, the annual rate of growth for F’s earnings is -2.66%. EPS reaches $1.63 in the final year of forecast compared to the current $1.91 EPS today. Fall in earnings appears to be a result of revenue declining at an average annual rate of -1.12%. Furthermore, the current 4.85% margin is expected to contract to 4.43% by the end of 2021.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Ford Motor, I've put together three pertinent factors you should further examine:

• 1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
• 2. Valuation: What is Ford Motor worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Ford Motor is currently mispriced by the market.
• 3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Ford Motor? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.