Ford Earnings: Strong Year-Over-Year Improvement and a Cash-Rich Balance Sheet Are Good to See

Ford’s first quarter gave us no reason to change our fair value estimate, and our overall thoughts on the stock are about the same as before the earnings release. Adjusted diluted EPS of $0.63 comfortably beat the $0.41 Refinitiv consensus, but the stock still fell by about 2% in May 2 after-hours trading. We think that continued macroeconomic fears beyond management’s control may be holding the stock back as well, in that Ford confirmed but did not raise its 2023 guidance—whereas GM modestly increased its 2023 expectations on April 25. Ford finished the quarter with a balance sheet we see in solid shape to handle recession risk, with net automotive cash of about $9 billion. Automotive cash and securities totaled $28.6 billion, and credit line availability brings total available funds to $46.2 billion.