Longbridge Dolphin will cooperate with Tesla, and its market value will surpass that of General Motors! Wall Street upgrades Ford Motor's rating and target price.

Wall Street analysts have upgraded their rating on Ford Motor's stock to buy. The reason is that Ford Motor's corporate execution is improving, which presents an opportunity.

Last week, Ford Motor announced that by 2024, its electric vehicles will be able to use Tesla's supercharging network.

However, Wall Street's attitude towards Ford Motor remains lukewarm, with less than 40% of analysts rating it as a buy. The average buy rating ratio for stocks in the S&P 500 index is about 53%.

In early 2023, slightly more than 40% of analysts rated Ford Motor as a "buy," with an average target price of about $13.70.

Upgrading Ford Motor's rating

Jefferies analyst Philippe Houchois upgraded Ford Motor's rating from hold to buy, with a target stock price of $16, up from $13.

Houchois is more confident that Ford Motor can "solve the long-standing problem of poor execution that has plagued the stock price," and better execution should lead to better profits.

Ford Motor recently restructured itself into three new business units: Model e, the electric vehicle business; Ford Blue is the fuel vehicle business; and Ford Motor's commercial business Ford Pro.

Ford Motor believes that by 2026, the new operating structure can achieve an operating profit margin of 10%.

But Wall Street does not expect real improvement, with the operating profit margin expected to be about 6% in 2023, and about 5% in 2026, a gap that is attractive to Houchois.

Ford Motor's market value surpasses General Motors

"This path is possible with simpler products and higher product concentration to improve the return on investment of the three units," the analyst wrote.

In Ford Blue, Houchois pointed out that Ford Motor plans to reduce costs by billions of dollars annually.

He expects Model e to be close to breakeven by 2025. Ford Motor expects Model e to lose about $3 billion by 2023.

For Ford Motor Pro, which focuses on selling software and services, it should generate higher and less cyclical profits and profit margins.

Including Tuesday's gains, Ford Motor's market value is about $2.8 billion higher than General Motors. In early April, Ford Motor's market value surpassed General Motors. This is rare. "In the past five years, Ford Motor's market value has been higher than General Motors for only about 14% of the time."