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• Jefferies analyst sees further downside in Ford stock to $9.00 in 2025.
• Philippe Houchois explained why in a research note on Monday.
• F share price has already lost nearly 30% over the past six months.

Ford Motor Co (F) could find “mild relief” as President-elect Donald Trump eases emissions regulations next year, as per a Jefferies analyst.

Philippe Houchois, nonetheless, expects 2025 to be another weak year for the legacy automaker due to the inventory overhang.

The investment firm downgraded Ford stock today to “underperform” and lowered its price target to $9.00 that warns of another 13% potential downside from here.

Ford stock is significantly lagging its rivals
 

Philippe Houchois recommends steering clear of Ford shares next year as “de-stocking has become an overhang with US inventory drifting up to 96 days in spite of solid US sales +15% (+4% YTD).”

In comparison, the number sits at 26 only for peer General Motors and an even lower 18 days for Stellantis.

Jefferies’ dovish note on Ford stock arrives months after the company lowered its full-year guidance for adjusted earnings before interest and taxes (EBIT) to about $10 billion from up to $12 billion.

Shares of the car manufacturer, however, pay a dividend yield of rather lucrative 5.77% at writing that makes them somewhat more attractive to own at least for the income investors.

What other challenges could hurt F share price?
 

Jefferies bailed on Ford Motor today because it faces a bunch of other challenges, including potential resizing in Europe as well.

Analyst Philippe Houchois sees further downside in $F also because the gap between its warranty provisions and cash outflows have grown rather significantly in recent years.

“The balance sheet is robust [but] potential claims from restructuring and warranty leave little cash for shareholders,” the investment firm told clients in a research note on Monday.

Despite its struggles, however, Ford came in ahead of Street estimates in its latest reported quarter.

The company earned 49 cents per share on $43.07 billion in automotive revenue versus 47 cents and $41.88 billion expected.

Still, Ford stock is currently down close to 30% versus its year-to-date high in July.

Ford shares not longer warrant a premium
 

Valuation was among other concerns that made Philippe Houchois take a bearish stance on Ford shares on Monday.

While investors have already punished the automaker for its continued struggles in recent months, the Jefferies analyst does not expect the coming year to be any different as $F is still trading at a premium to General Motors.

He’s not convinced that Ford stock warrants that premium anymore.

$F is currently trading at about 6.2 times its estimated earnings for 2025.

Despite challenges, however, the Detroit automaker that was recently fined $165 million continues to see its free cash flow to fall in the range of $7.5 billion and $8.5 billion on an adjusted basis in 2024.

The Street-high price target on F shares currently sits $19 that translates to about an 85% upside from here.

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