To The Moon

$Ford(F)$ is expected to release earnings on 06 Feb 2024 after the market closes (AMC).

Investors will be looking out for the company's comments on its electric vehicle line's outlook along with its forecast for 2024. Ford stock price fell by 4.53% on Monday (05 Feb), I think investors could be overreacting to concerns over EV demand.

In January, Ford posted a 24% Q/Q increase in sales of EVs and a 55% rise in sales of hybrid cards for the fourth quarter. For the full year, U.S. sales totaled 1,995,912 vehicles – up 7.1% and the best since 2020 according to Ford. This included 72,608 EVs (up 18%) and 25% higher hybrid sales.

These numbers should be pretty encouraging for Ford stock price, but I think what would be more interesting would be Ford’s plan to ramp up the manufacture of its gas-powered Bronco and Ranger line and reduce production of the F-150 Lightning EV. Come 01 April, production at the Rouge EV Center was also reduced to one shift as the company expected global growth in EV sales in 2024 will be "less than anticipated."

I would think Ford would produce a pretty impressive earnings result as EV and hybrid sales continue to grow much faster than gasoline-driven car sales which showed a year-over-year sales increase of only 5.5%.

Technical has shown bullish crossover which happen and currently Ford is trading above 50-day MA period but below the 200-day MA, this could mean some opportunities after investors get over their concerns of sales number.

Ford Motor (F) Last Reported Earnings

F last reported earnings on 30 Nov 2023 before the market opened (BMO). F shares declined -3.1% the day following the earnings announcement to close at 10.26. Following its earnings release, 67 days ago, F stock has drifted +18.2% higher.

From the time it announced earnings, F traded in a range between 9.63 and 12.50. The last price (11.59) is closer to the higher end of range.

Estimated implied straddle for upcoming earnings is 7.6%. I would think this time might be different as the sales number from Q4 does say something about the revenue. Ford EV journey should be seeing result produced starting from Q4 2023.

Ford Motor (F) Post Earnings Movement

The options market overestimated F stocks earnings move 58% of the time in the last 12 quarters. The predicted move after earnings announcement was ±6.3% on average vs an average of the actual earnings moves of 5.4% (in absolute terms).

Even though we could see quite a significant EV sales number from Ford, the implied still suggest that it is overvalued in option valuation, there might be a chance that we could see only a small upside price effect move.

Ford Motor (F) Earnings Implied Volatility Crush

F's last earnings implied volatility (IV30) going into earnings was 41.3. The last time F released earnings, the implied volatility dropped to 38.4, resulting in an implied vol crush of 7%. 5 days after earnings, the 30 day IV was 27.8.

• Average Implied Volatility Crush For F Earnings: 15%

• Average 30 Day Implied Volatility 1 Day Before Earnings: 48.6

• Average F 30 Day IV for the Day of Earnings: 41.3

• Average 30 Day Implied Volatility 5 Days After Earnings: 40.9

Summary

With more than 20% sales in last quarter and overall 2023 sales of EVs and hybrid have shown the best performance since 2020, I believe we could be seeing a positive price movement from Ford post earnings.

There is a chance that we could see a small increase in stock price following its earnings result released.

Appreciate if you could share your thoughts in the comment section whether you think Ford could produce a better-than-expected earnings result and give a positive price effect post earnings.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.