Ford upgraded to overweight from underweight at Morgan Stanley

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Ford’s stock jumps after Morgan Stanley swings to bullish from bearish

Shares of Ford Motor Co. jumped 4.3% in active morning trade Wednesday, after Morgan Stanley swung to bullish from bearish on the automaker, citing valuation and the expectation that restructuring and strategic redeployment could halt years of underperformance. Analyst Adam Jones raised his rating to overweight, after being at underweight since 2014, and boosted his stock price target to $15, which is 34% above current levels, from $10. “We believe the skew of negative sentiment has taken valuation to attractive levels…levels where we calculate the value of the F-150 franchise may be worth more than 150% of the company’s enterprise value,” Jones wrote in a note to clients. “While Ford still has a lot of room to improve its performance vs. peers, we believe our estimates may have bottomed.” Jones said he’s raised his underlying earnings forecasts “by the greatest amount in nearly five years,” with his 2018 earnings-per-share estimate rising to $1.44 from $1.40, his 2019 EPS to $1.26 from $1.06 and his 2020 estimate to $1.33 from $1.07. The stock has dropped 10.4% over the past 12 months, while rival General Motors Co. shares have gained 3.8% and the S&P 500 has rallied 17.1%.

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