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The all-electric Ford Mustang Mach-E could be a rival to Tesla vehicles.
David McNew / Getty Images
The last vehicle to leave
Ford‘s
the iconic Mustang brand is a sporty, all-electric vehicle. And it could be bad news for Tesla.
He
Ford engine
Mach-E began shipping in late 2020. The test from JP Morgan analyst Ryan Brinkman drove the car on Thursday and he really liked what he saw. If traditional carmakers start building desirable electric vehicles, this could pose a considerable threat.
Tesla,
which has largely dominated that space in the US so far.
After driving the car -that
Ford
(ticker: F) tags an SUV: Brinkman “walked away completely impressed by the Mach-E while seeing negative implications for Tesla’s valuation.” The car offers three driving modes: Whisper, Engage and Overflow. Each offers a more aggressive acceleration than the last.
The Mach-E is compared to Tesla’s Model Y (TSLA). “We don’t intend to argue that one vehicle is necessarily superior to the other,” Brinkman writes. But he notes that Mach-E still meets the requirements to get a $ 7,500 federal tax credit. Tesla has sold too many cars to be eligible for this particular purchase subsidy.
Its most general point is that the Mach-E is a good car, comparable to a Tesla. This is not something car buyers can say so far about many electric vehicle deals.
The best electric vehicles from Tesla’s competitors could contribute to Tesla’s valuation. Tesla is quoted at more than 17 times the estimated sales for 2021.
Ford
and other traditional car manufacturers are quoted for a fraction of that multiple. The auto industry is not used to this type of growth stock multiple.
Brinkman, meanwhile, is a notable Tesla bassist, with one of the lowest price targets on Wall Street. It values the sale of shares and its target price is only $ 105 per share. Tesla shares have added more than that amount just this week and traded around $ 880 on Friday.
Brinkman rates
Ford
Hold shares. Its target price for these shares is $ 10.
De Barron is a little more bullish on Ford than Brinkman, recently writing positively about the carmaker, believing that new leadership would result in lower costs and more rational vehicle development. More electric vehicles are also needed, such as the Mach-E.
Since that article appeared in late November, Ford shares have fallen 1%. He
S&P 500
i
Dow Jones Industrial Average,
by comparison, they increase by approximately 5% and 4%, respectively.
To say that the threat of new competition has not affected Tesla’s actions is an understatement. Shares of Tesla have risen 50% since late November. Improved deliveries of expectations and analyst updates have helped further boost Tesla’s shares. Shares gained about 740% in 2020. Shares have increased by about 25% so far.
On Friday, Ford shares fell 0.6%. Shares of Tesla jumped 7.8%, closing at a new all-time high. Investors seem to love the actions of electric vehicles, regardless of the time frame. Ford shares fell about 6% in 2020.
De Barron it has not collected, nor papered, Tesla shares. Right now, about a third of analysts cover Tesla stock-type stocks. The average purchase valuation ratio of shares in the Dow is approximately 57%. This is a little better than Ford: About 22% of analysts covering Ford stock shares buy. They haven’t bought the change yet under new CEO Jim Farley.
Write to Al Root at [email protected]