Is Ford on Track to Achieve Its Adjusted EBIT Target by 2029?
Ford Motor Company F exited last year as a structurally stronger company, establishing a solid foundation to achieve its long-term target of an 8% adjusted EBIT margin by 2029, per the company’s fourth-quarter 2025 earnings transcript. In 2025, the company reported an adjusted EBIT margin of 3.6%, and it expects first-quarter 2026 EBIT to remain roughly flat sequentially at 2.3% as it continues to work through the impact of Novelis-related aluminum costs. Ford anticipates a gradual normalization in the second quarter, with a return to its underlying EBIT run-rate level in the second half of the year as volumes stabilize and portfolio optimization initiatives gain traction.
Profitability in the first half of 2026 is expected to face pressure from temporarily elevated aluminum sourcing costs and broader commodity headwinds, though some market factors may provide partial offsets. In the second half, earnings are projected to improve as production volumes stabilize, additional truck capacity comes online, and aluminum supply costs normalize. Overall, the company has indicated that 2026 will likely be weighted toward stronger back-half performance as temporary headwinds subside.
To support its path to an 8% EBIT margin, Ford is increasing investment in its Ford Blue business, including hybrids and new higher-margin products, while moderating the pace of investment in Model e. Although investment in Model e remains significant, the company is intentionally scaling it down to better balance capital allocation. This disciplined investment strategy is designed to position the company over the next several years to sustainably achieve its targeted margin profile. F sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Margin Outlooks of Ford’s Competitors
General Motors Company GM expects its annual U.S. production to increase to an industry-leading two million units in 2026 as it begins producing the Chevrolet Equinox in Kansas, moves Chevrolet Blazer production to Tennessee and adds capacity for the Cadillac Escalade while launching next-generation full-size pickups at the Orion Assembly plant in Michigan. Its warranty expenses are improving, and its EV-related losses are expected to decline. As a result, the company anticipates full-year 2026 adjusted EBIT margins in North America to return to the 8-10% range.
In 2026, Rivian Automotive, Inc. RIVN expects a sizable adjusted EBITDA loss of $1.8-$2.1 billion. The loss reflects higher R&D spending to accelerate its autonomy roadmap, including LiDAR integration, RAP1 chip deployment and limited point-to-point features, along with rising SG&A costs as it expands its sales and service network to support the R2 ramp.
F’s Price Performance, Valuation and Estimates
Ford has underperformed the Zacks Automotive-Domestic industry in the last six months. Its shares have gained 15.4% compared with the industry’s growth of 27.9%.
Image Source: Zacks Investment Research
From a valuation perspective, F appears undervalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 0.31, lower than the industry’s 3.43.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for F’s 2026 and 2027 EPS has moved up a penny in the past 30 days. The Zacks Consensus Estimate for F’s 2027 EPS has moved down a penny in the past seven days.
Image Source: Zacks Investment Research
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Global bond market sell-off intensifies: 10-year JGB yield hits 30-year high, 10-year US Treasury continues to fall, US stock index futures decline, oil rises, gold falls
US stock index futures declined, with Nasdaq futures extending their intraday loss to 0.6%, and S&P 500 futures falling by 0.4%. Japan's 10-year government bond yield surged 10 basis points on Thursday to 3.075%, reaching its highest level since August 1996. Brent crude rose 0.2%, while gold edged down by 0.2%, trading near $4,280 per ounce.
Altcoin FET Sits Inside a Massive Macro Uptrend, Experts Expect Bullish Comeback for FET
Morgan Stanley and Dell (DELL.US) COO have an in-depth discussion: "This time is different"—AI agents are not just another refresh cycle, but a TAM expansion; the probability of a $756 bull market scenario is rising
Morgan Stanley released a research report stating that after a one-on-one meeting with Jeff Clarke, Chief Operating Officer at Dell headquarters, they have gained a deeper understanding of their bullish thesis on Dell. However, they still maintain a "neutral" rating and a target price of $511.
US Stock IPO Preview: Rapid Revenue Expansion, How Will TTG International (TTG.US) Seek New Growth Opportunities in Cross-Border Logistics?
In the future, changes in the company's business scale, customer structure, and profitability will be key dimensions to observe its growth potential.
Crypto prices
More
