Ford Stock Beat Tesla Last Year. Here’s What It Will Do Next.
Ford stock is on a tear. After rocketing in 2021, and a big start to 2022, here’s what could happen next.
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One automotive stock is on fire as investors get more excited about rising electric-vehicle sales in the U.S. and rising EV production at the company.
The stock, of course, is Ford Motor (ticker: F). Ford has been out Tesla-ing Tesla (TSLA) lately. Ford stock ended Tuesday with a gain worthy of an Elon Musk smirk after Ford said it would double the annual production target of the all-electric F-150 pickup truck.
Ford stock is now up 17% so far in 2022 after rising 136% in 2021. Tesla stock, for its part, is up 9% so far in 2022, after a 50% gain in 2021.
Investors may be wondering if Ford shares can keep rising. The answer, of course, is that depends on many factors, including Ford management decisions and the overall economy.
History, however, favors another gain in 2022. Ford stock gained more than 130% back in 1982. Ford stock went up in the six years after that, gaining another 484% in total by the end of 1988.
Ford stock also gained 337% in 2009, when the financial crisis was winding down. Shares added another 68% in 2010, but fell 36% in 2011. The streak didn’t last as long as the 1980s run.
Looking back, Ford stock has gained triple digits in three years: 1982, 2009, and 2021.
This is all just some fun with numbers. Numerology isn’t an investment thesis. But there are a lot of interesting numbers: Ford stock has risen 22 out of the past 40 years. The S&P 500 has ended 30 out of the past 40 years with gains. Ford stock has outperformed the S&P 500 15 of the past 40 years, including 2021.
Tesla stock doesn’t have the same history as Ford. Tesla shares have gained triple digits two times in the past 11 years—2013 and 2020—and have fallen only in one year, 2016. Tesla stock has outperformed the S&P 500 in nine of the past 11 years.
There is another way Ford stock has become like Tesla: analyst price targets. The average price target for Ford stock is about $20, implying a downside of about 18%. Tesla stock typically trades at a premium to what Wall Street expects; the average target price for Tesla stock is now just under $900, implying a drop of about 22% from recent levels.
For all of Ford’s recent gains, Tesla is still Tesla. It’s worth roughly 12 times more than Ford and trades at about 130 times estimated 2022 earnings per share. Ford stock trades for about 11 times estimated 2022 EPS.
Write to Al Root at email@example.com