Is Ford Stock a Buy Right Now While It's Down From Its Peak?
Key Points
Ford's stock has slipped 20% in the past month.
Ford Energy was announced in early May as the company's pivot into battery energy storage systems.
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Ford Motor Company (NYSE: F) is down nearly 20% from its late-May peak. A weak sales report, uncertainty around tariffs, and another recall largely triggered the pullback. The news wasn't great, but Ford has an unrelated catalyst investors should pay attention to.
Ford Energy, the company's newest endeavor, marks a shift away from a sluggish electric-vehicle segment toward battery energy storage systems (BESS) for utilities, data centers, and large industrial and commercial customers in the U.S. Ford Energy plans to deploy at least 20 gigawatts annually, beginning in late 2027.
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Even with Ford Energy's promising outlook, the automaker is still facing substantial headwinds. The EV division will likely post approximately $4 billion in losses this year. As competition increases, the recalls and macroeconomic picture in the U.S. don't make things any easier for the brand.
Image source: Getty Images.
Ford's stock is relatively inexpensive. Its forward P/E ratio is currently less than 10, and with a $0.60 annual dividend, the 4.25% yield is attractive. Ford's longer-term success will be determined by how well its energy division performs.
The demand is there. The BESS market is expected to exceed $160 billion annually by 2034, growing at a nearly 19% CAGR. Ford needs Ford Energy to offset the losses from EVs. If it can achieve that goal, I'd expect patient investors to be rewarded. Still, revenue from Ford Energy won't have a significant impact for at least another year, so patience is required.
Should you buy stock in Ford Motor Company right now?
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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