Ford builds up inventory as it looks to move past chip shortages
F +0.06%Apr. 04, 2022 4:09 PM ET1 CommentAn industry-wide chip shortage hurt Ford Motor Company (NYSE:F) in March when U.S. light vehicle sales fell 26%, but analysts have noted that demand remains strong and inventory is rebuilding.
Overall inventory in transit rose 73.5% from February, including up 127% for the crucial F-Series line. That means the F-Series year-over-year decline are unlikely to repeat all year, especially when the year-over-year comparables start to lap when the chip shortage started in June of 2021.
Ford's (F) push to have consumers order ahead of time continues to gain momentum with a record 41% of retail channel deliveries from previously placed orders, which is up notably from 33% in February
"Ford is turning itself around by focusing on light-truck models in the U.S., which we think is the right move given light trucks are over 75% of U.S. industry new light-vehicle sales," stated Morningstar analyst David Whiston.
Whiston thinks Ford's challenge is to increase share profitably while elevating Lincoln into a global luxury brand. Headwinds from areas such as restructuring and commodities are seen, while investments in mobility and electrification are noted to take years to bear fruit.
Shares of Ford (F) have shed close to 20% year-to-date, but are ahead of the return of rival General Motors.
The Seeking Alpha Quant Rating is still flashing Strong Buy.