Where Will Ford Motor Company Be in 3 Years?
Investment
The Motley Fool

Where Will Ford Motor Company Be in 3 Years?

July 25, 2025
07:30 AM
5 min read
AI Enhanced
investmentmoneyfinancialautomotivemarket cyclesseasonal analysistariffsdata analysis

Key Takeaways

Ford's savvy handling of the Trump administration's tariff curveball has boosted sales.

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5 min read

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investment

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Published

July 25, 2025

07:30 AM

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The Motley Fool

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Key Topics
investmentmoneyfinancialautomotivemarket cyclesseasonal analysistariffsdata analysis

Interestingly, This leads to the conclusion that automotive industry has been reeling for months ing the Trump administration's announced tariffs, which have threatened to increase costs, ly leading to higher prices for consumers

Ford Motor Company (F -1

Moreover, 05%) apached the situation aggressively, marketing to its American roots and offering vehicle buyers employee-level pricing for a three-month period

Moreover, Ford recently announced fantastic second-quarter vehicle sales, including an estimated 1, in today's financial world. 8-percentage-point gain in market

Now, the company has ed it up with a new motion aimed at lowering up-front costs for buyers

However, With Ford building sales momentum, it's fair to ask where the stock might be in three years

I dove into the numbers to find out

Moreover, Here is what you need to know (something worth watching)

Furthermore, Image source: Getty Images

However, Combating tariff headwinds with volume Despite Ford's standing as a leading American vehicle brand, it is a global, both in supply chain and in sales

The evidence shows tricky part is figuring out just how tariffs will affect the company, which is remarkably difficult due to the Trump Administration's inconsistent messaging on policy (quite telling), amid market uncertainty

Conversely, As of first-quarter earnings, management was anticipating a net headwind of $1, considering recent developments

Furthermore, Meanwhile, 5 billion to Ford's 2025 earnings before interest and taxes (EBIT)

Additionally, It appears that part of Ford's strategy has been to lean into the tariff headwinds as an opportunity to leverage its American identity with U (noteworthy indeed) (an important development), given the current landscape

Ford ext employee-level pricing to buyers as part of its "From America, For America" campaign

However, The motion, which ran from early April to early July, was a winner, in light of current trends

On the other hand, Ford's vehicle sales skyrocketed by 14, in today's market environment. 2% in Q2 2025, including: The highest Q2 sales for F-Series trucks since 2019, in today's market environment

Record sales for electric vehicles, in this volatile climate

What the re reveals is highest volume for the Lincoln brand since 2007. 20% growth in paid subscriptions for Ford software, given current economic conditions

Automotive manufacturers have high fixed costs associated with operating factories

Investors will need to see management's d financial outlook when Ford releases its full Q2 earnings on July 30 (this bears monitoring)

Still, it would ve a savvy move by Ford if the company could grow its sales volume enough to offset tariff-related costs, while boosting market and giving the Ford brand some momentum in the cess

Ford's fundamentals remain resilient Tariffs, in some shape or form, are looming

On the other hand, Analysts have already baked a sizable hit to earnings into Ford's 2025 estimates

In contrast, The consensus on Wall Street is that earnings will drop from $1 (remarkable data). 84 per last year to an estimated $1

Meanwhile, 12 this year

Beyond the effect on earnings, the important takeaway is that Ford can remain fitable

While investors between the lines until Ford releases its Q2 earnings, management bably wouldn't its Q2 motion with another campaign if the company were losing more money selling all those additional vehicles

The dividend, yielding over 5. 3%, is still just 54% of 2025 earnings estimates, and management reiterated Ford's balance sheet strength in Q1, which with $27 billion in cash and $45 billion in total liquidity

On the other hand, Ford should have ample financial resources to weather the tariff uncertainty, and its decision to pursue market in this situation underscores that confidence

Conversely, Where might the stock be in three years

Meanwhile, It's worth noting that the auto industry is highly competitive, and companies must continually invest in updating, maintaining, and upgrading expensive factories, considering recent developments

Ford is a significant industry player, yet its stock has still badly lagged the broader stock market over time

Therefore, even if Ford successfully navigates the tariff headwinds, it's not guaranteed to yield great investment results, amid market uncertainty

Currently, Ford's free cash flow yield is 20%, on par with its average over the past decade

F Total Return Price data by YCharts

This analysis suggests that 's tough to envision the stock fetching a higher valuation while tariffs continue to weigh on the

The hope is that Ford sells more vehicles at lower margins (due to tariffs) to the point that free cash flow grows, amid market uncertainty

Upcoming Q2 earnings will give investors a fresh set of expectations regarding how tariffs will affect Ford's fits (fascinating analysis)

Keep in mind that Ford's current valuation reflects pre-tariff cash flows, in this volatile climate

I suspect that Ford will be working back to 2024 fits over the next few years

Meanwhile, When it all shakes out, much of the tariff-related costs and higher sales volume could somewhat offset each other

Additionally, In that scenario, the stock price may not change much, in today's financial world. 3% dividend could represent a significant portion of the stock's investment returns

So, for now, it appears that Ford stock has limited upside over the next three years

Of course, that could change as the tariff situation evolves, in this volatile climate.