UBS Reiterates Buy on Ford, $14 PT

UBS analyst Joseph Spak reiterated a Buy rating and $14.00 price target on Ford (NYSE: F).

“We were able to tour Ford’s EV Development Center (EVDC) in Long Beach, CA aka their “skunkworks” facility with Alan Clarke, VP of Advanced Development Projects.

This is the first time F has given outside access to the facility.

Overall, we’d say the setup, activities, and goals of the EVDC are set up much more like an EV startup than a legacy OEM. The main focus is speed, agility, innovation and efficiency.

This is encouraging as in our view, legacy OEMs need to continue to invest in and be successful with EVs to survive.

Financially, the UEV platform is key to reducing Model E’s >$4bn annual loss, first to break-even but then to profitability.

To help with the scope of this importance, all else equal if Ford is even able to get Model E to break-even, we believe that is a 40% earnings improvement vs. current “run-rate” adjusted earnings.

The challenge from here for UEV is: a) building out/automating production, b) matching up timing between product, market fit and consumer demand, c) scaling learnings to greater Ford.”

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