Ford's Q2 Shines, But Analysts Warn Of Recall Hangover And Cost Pressures

Ford Motor Company (NYSE:F) shares are trading higher on Thursday after the automaker posted second-quarter results that exceeded Wall Street expectations on Wednesday, driven by solid vehicle volumes and favorable pricing trends.

Ford reported second-quarter revenue of $46.94 billion, beating the consensus estimate of $42.77 billion, according to Benzinga Pro. 

The Detroit-based automaker reported second-quarter adjusted earnings of 37 cents per share, beating estimates of 31 cents per share.

Also Read: QUALCOMM Stock Is Trading Lower Thursday: What’s Going On?

Following Ford’s earnings release, Bank of America Securities (BofA) analyst Federico Merendi reaffirmed a Buy rating on the stock and held firm on a $14 price forecast. Meanwhile, Goldman Sachs analyst Mark Delaney maintained a Neutral rating, setting his price forecast at $11.

BofA’s Take

Merendi observed that Ford’s results exceeded consensus expectations due to strong volumes and improved pricing but came in below BofA estimates, largely due to an unexpected $400 million FX headwind that was initially projected to be neutral or positive.

The analyst noted that most recent recalls relate to older vehicles manufactured before stricter quality controls were introduced, suggesting visible improvements may take time.

Merendi also pointed to Ford’s response to shifting U.S. environmental regulations as a positive, citing reduced compliance costs by $1.5 billion and a strategic push in large ICE vehicle sales.

However, the analyst flagged potential risks to fourth quarter performance, particularly as it coincides with the rollout of Model Year 2026, which could introduce cost pressures for consumers already facing affordability challenges.

Merendi lowered its fiscal year 2025 earnings per share estimate from $1.21 to $1.20.

Goldman Sachs’ Perspective

Delaney noted that when adjusting for Ford’s projected $2 billion in tariff costs this year, the company’s core business appears to be tracking toward approximately $9 billion in EBIT, above the original $7-$8.5 billion guidance, supported by cost management efforts and stronger operational performance.

According to the analyst, the recent U.S. policy developments and Ford’s second quarter results together indicate potential for higher profitability, with the company poised to benefit from favorable price-mix dynamics tied to its U.S. manufacturing base and eased emissions requirements.

Delaney highlighted that the Pro business outperformed expectations with a 12.3% EBIT margin, driven by improved vehicle profitability and growing contributions from software, digital, and physical services, which now represent 17% of Pro EBIT over the past year.

Price Action: F shares are trading higher by 1.93% to $11.08 at last check Thursday.

Read Next:

• Trump EPA Wants To Overturn 2009 Endangerment Finding That Controls Carbon Emissions To End ’16 Years Of Uncertainty For Automakers’

Image via Shutterstock