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Ford (NYSE: F) stock price remained in the red in fiscal 2020, but the stock price of one of the world’s largest automobile manufacturers recovered sharply by 42% in the last six months.
The recovery is mostly attributed to the rebound in vehicle sales all over the world. The rosy outlook for fiscal 2021 added to investors’ sentiments. The company’s strategy of accelerating its electric vehicle production is among the catalysts for share price momentum. Its first electric vehicle, Mustang Mach-E, has recently started hitting showrooms for reviews.
Ford stock price is currently trading around the $8.50 level, down slightly from the 52-weeks high of $9.45 per share. Shares of Ford are up more than 100% from March low of $4 a share.
Vehicles sale momentum will support Ford stock in 2021
Although Ford has had a rough 2020 due to pandemic, the automobile industry’s rosy outlook will support its share price momentum.
The research firm CFRA reported that auto sales are likely growing at a double-digit rate in 2021.
“After COVID-19 ended a five-year streak of 17M-plus light vehicle sales, the firm expects heavy growth on the back of a vaccine-aided GDP rebound, improving consumer sentiment, low-interest rates, and low gas prices (and a full-year 16M units, a 12.2% gain),” CFRA noted.
IHS Markit also hinted at the extension of vehicle sales momentum into fiscal 2021. The report shows global new light-vehicle sales are expected to grow 9% from a 2020 level, thanks to a recovery in industry demand levels.
Ford’s September quarter automotive revenue grew 2.3% year over year, topping analysts’ expectations by $1.8 billion. Moreover, the company’s strategy of introducing electric vehicles in the days ahead supports the bull case. Its electric vehicle Mustang Mach-E is rated the best vehicle to buy in 2021, got 8.6 out of 10 in TCC Ratings.
Related video: Ford Mustang Mach-E Review: Interior, Tech and Handling