F

Why Ford Stock Is Rising Today

What happened

Shares of Ford Motor Company (NYSE: F) were moving higher again on Wednesday morning, on growing signs that the company's new Bronco SUV lineup is resonating strongly with consumers. 

As of 10:30 a.m. EDT today, Ford's shares were up about 4.9% from Tuesday's closing price.

So what

I'm sure most auto investors have heard the news by now, but in case you haven't: Ford's iconic rugged off-roader, the Bronco, is back.

In fact, as Ford revealed on Monday night, it's back in three different flavors: the "regular" Bronco, a Ranger-based SUV offered in two- and four-door versions, and a smaller Bronco Sport that shares its basic architecture with the Ford Escape. 

It's not hard to divine Ford's business strategy here: The company wants a piece of the fat profits that SUV brands like Fiat Chrysler Automobiles' (NYSE: FCAU) Jeep have been generating in recent years. (Just like their 1960s namesakes, the big Broncos are clearly aimed directly at the turf dominated by Jeep's iconic Wrangler, while the Bronco Sport is Ford's alternative to unibody off-roaders like the Jeep Compass and Cherokee.)  

A yellow two-door 2021 Ford Bronco, an off-road SUV, shown on a hillside.

Amid much anticipation, Ford unveiled its all-new 2021 Bronco on Monday night. Image source: Ford.

Ford's original plan for the Bronco's launch, which included debuts at two U.S. auto shows, had to be reworked amid the coronavirus pandemic. But Ford's Plan B, an online reveal with Tesla-inspired $100 "reservations" opening immediately, seems to have generated plenty of interest: The company said on Tuesday morning that its top-of-the-line "First Edition" Broncos, limited to 3,500 examples, were already sold out, and demand for the Bronco's other trims has been strong.

For comparison, Fiat Chrysler sold about 56,500 Wranglers last quarter, or an average of roughly 18,800 per month. If Ford can move 10,000 Broncos a month in the U.S. in the off-roader's first year back in the lineup, it'll be doing well. 

Now what

Auto investors are looking ahead to Ford's second-quarter earnings report for an update on the business. Management's guidance told us to expect a huge loss for the second quarter as the company worked to recover from pandemic-related shutdowns, but Ford's sales in the U.S. and China seemed to outperform expectations over the period. 

Will Ford give us an upbeat earnings surprise? We'll find out when the Blue Oval reports after the market closes on July 30. 

10 stocks we like better than Ford
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Ford wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of June 2, 2020

 

John Rosevear owns shares of Ford. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.