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The all-electric Ford Mustang Mach-E could prove to be a rival to Tesla vehicles.
David McNew / Getty Images
The most recent vehicle he got out of
I’m seeingS
The iconic Mustang is a fully electric crossover vehicle. And that could be bad news for Tesla.
Ford Motor
Mach-E began delivering in late 2020. JP Morgan analyst Ryan Brinkman’s test drove the car on Thursday and he liked it more than he saw. If traditional carmakers start building the desired electric vehicles, this could pose a considerable threat.
Tesla,
which has largely dominated that space in the US so far.
After driving the car – which
I’m seeing
(tick: F) labels an SUV – Brinkman “left completely impressed by Mach-E, while seeing negative implications for the maximum evaluation of Tesla”. The car offers three driving modes: Whisper, Engage and Unbridled. Each offers a more aggressive acceleration than the last.
Mach-E compares most closely with a Tesla Y model (TSLA). “We do not intend to claim that one vehicle is necessarily superior to another,” writes Brinkman. He points out, however, that Mach-E still qualifies for a $ 7,500 federal tax credit. Tesla sold too many cars to still qualify for that purchase subsidy.
Its broader point is that the Mach-E is a good car, comparable to a Tesla. It is not something that car buyers, up to this point, could say about many electric vehicle deals.
Better EVs from Tesla competitors could help evaluate Tesla. Tesla trades sales more than 17 times estimated in 2021.
I’m seeing
and other traditional car manufacturers trade for a fraction of that multiple. The automotive industry is simply not accustomed to this type of growing stock multiples.
Brinkman, in turn, is a notable Tesla bear with one of the lowest targeted prices on Wall Street. It evaluates the sale action, and its target price is only 105 USD per share. Tesla shares added more than that just this week and are trading at about $ 880 on Friday.
Brinkman rates
I’m seeing
Hold shares. Its target price for that action is $ 10.
Barron’s is a little more optimistic for Ford than Brinkman, recently writing positively about the carmaker, believing that new driving would lead to lower costs and more streamlined vehicle development. More electric vehicles are needed, such as Mach-E.
Since the article appeared at the end of November, Ford shares have fallen by 1%.
S&P 500
and
Dow Jones Industrial Average,
for comparison, they increased by about 5% and 4%, respectively.
To say that the threat of new competition did not hit the Tesla stock is an understatement. Tesla shares have risen 50% since the end of November. Better-than-expected deliveries and analyst updates helped drive Tesla stock further. Shares gained about 740% in 2020. Shares have increased by about 25% so far.
On Friday, Ford shares fell 0.6%. Tesla shares rose 7.8%, closing at a new all-time high. Investors seem to love EV shares, regardless of the time frame analyzed. Ford shares fell by about 6% in 2020.
Barron’s did not choose, or did not panel, the Tesla stock. Currently, about one-third of analysts cover shares of the Tesla Buy stock. The average purchase ratio for the Dow is about 57%. This is slightly better than Ford: About 22% of analysts covering Ford shares in the course of stock buy. They have yet to win the change under new CEO Jim Farley.
Write to Al Root at [email protected]