Ford Stock (NYSE:F) Gains with Better Access to Rare Earths

Business Insider

a day ago

One of the biggest supply chain problems for companies like legacy automaker Ford (F) is the access to rare earth minerals of the kind commonly used in electric vehicles. But a new report says that getting those rare earths out of one of their biggest sources, China, will actually be a little easier now. That news made investors breathe a little easier themselves, and shares were up nearly 2% in Friday afternoon's trading.
Confident Investing Starts Here:
China has brought out a set of temporary export licenses, reports note, which will offer up access to rare earths for each of the Big Three automakers, which include General Motors (GM) and Stellantis (STLA) as well. Reports note that at least some of the licenses are valid for the next six months, which should keep the lot of them in rare earths for some time to come.
But it was hard not to notice that this change came just after a recent phone call between President Trump and President Xi Jinping, suggesting that that was part of some larger deal between the two. The move to restrict the supply of rare earth minerals has left many companies scrambling to fill in the supply gaps, and left many considering China a major bottleneck in the supply chain. With China producing about 90% of the world's supply, it is clear that they have the whip hand when it comes to these elements.
We're All Getting Concerned About These Recalls
You have likely noticed by now that the news around here, when it comes to Ford, seems to reference 'recall' a lot lately. Granted, some of these recalls have been minor to say the least; recalls that impact a handful of cars, or that are fixed with a software update. But not all of them have been so trivial, and some are starting to wonder if Ford's quality issues are starting to flare back up again.
Daniel Ives, analyst with Wedbush Securities—who has a four-and-a-half star rating on TipRanks—recently noted that Ford was in a 'code-red situation…after a disaster quarter.' Rising warranty costs connected to all these recalls were hurting Ford, much as they did last year at this time. And with more recalls seeming to crop up, that could indeed prove a problem. However, bear in mind that the recalls are not all problems, especially when software is involved. So while Ford's recall count is on the rise, many of these recalls are much more simply addressed than they once were.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 12 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 16.87% loss in its share price over the past year, the average F price target of $9.71 per share implies 5.18% downside risk.