Ford Motor (F) recently reiterating its battery energy storage business plans likely more linked with the AI trade rather than on business fundamentals, RBC Capital Markets said in a research report emailed Friday.
The company will produce batteries domestically, making it eligible for regulatory benefits. The energy business value could range from $1 billion to $5 billion, assuming a 10% earnings before interest, taxes, depreciation, and amortization margin consistent with a systems integrator approach and 15% margins driven by a more insourced strategy at the high-end, analysts wrote.
For the Ford Model E segment, the guided path to breakeven by 2029 is multi-pronged, given that the energy unit is expected to generate positive earnings before interest and taxes, legacy electric vehicle losses are likely to narrow, the universal EV platform launches in 2027, and European margins are likely to benefit from the Renault partnership, according to the note.
The brokerage said it reiterated its sector perform rating on the stock and price target of $13 per share.
Price: $13.37, Change: $-1.11, Percent Change: -7.67%