Citi recommended buying Ford shares following the earnings report. Why does the bank expect them to rise by 33%?

Analysts at Citigroup raised their rating on Ford Motor shares from “Neutral” to “Buy” after the automaker’s earnings exceeded market expectations. At the same time, the bank raised its price target to reflect the new forecasts, from $19 to $20, which implies growth potential of approximately 33% relative to the previous session’s closing price.

The day before, the automaker beat Wall Street analysts’ forecasts for adjusted earnings per share, which came in at $0.42 versus the projected $0.35. For the second time this year, Fors raised its 2026 earnings forecast—to $10–11 billion from the previous $8.5–10.5 billion— and also raised its forecast for adjusted free cash flow to $6–7 billion from $5–6 billion.

Ford’s strong results in the first half of 2026 were driven by a profitable sales mix and improved pricing, notes Citigroup analyst Michael Ward. “We have raised our 2026 earnings per share forecast from $1.75 to $1.90 to reflect the better-than-expected second-quarter 2026 results, as well as the ramp-up in F-Series pickup production in the second half of the year,” Ward writes in a note to clients cited by CNBC.

In the long term, improved operating metrics will allow Ford to invest more aggressively in new business areas, according to the analyst. He also believes that the company’s energy division could become a source of high-margin revenue in the future, although it will take several more years to fully monetize it.

During trading on July 29, the automaker’s shares rose 8%, and year-to-date, they have gained nearly 19%. The average price target for Ford shares is $15.6, which implies a 4% upside potential relative to the closing price on July 28.

Despite Citigroup’s optimism, Wall Street as a whole remains cautious about Ford. Most analysts—14 out of 23—advise investors to hold the stock, while two recommend selling, according to MarketWatch. At the same time, Ward believes that investor sentiment toward the automaker is beginning to shift thanks to an acceleration in F-Series pickup production, a reduction in warranty costs, improved aluminum supply, and a slowdown in the rise of raw material costs.

This article was AI-translated and verified by a human editor