Ford Motor Co. Chief Executive Mark Fields, under pressure from the board to sharpen the company’s strategy, met Friday with Wall Street analysts who have expressed increasing frustration with its stock price performance.
RBC Capital Markets analyst Joseph Spak said he left a meeting believing the company is aiming to improve its communication with investors to demonstrate resilience in its core automotive business and outline the payoffs for investments in future technology.
“We believe positive messaging developments lie ahead,” Mr. Spak said in a note to investors Friday.
The Wall Street meetings, confirmed by a Ford spokesman, comes as Mr. Fields faces pressure from directors and shareholders to focus the company’s strategy and reverse a prolonged slump in the stock price.
Mr. Fields told investors on an earnings call in April the company needed to do a better job quantifying the revenue and growth potential of the new technologies it is investing in as part of a broader plan to diversify beyond its core auto business.
Mr. Spak said one option would be breaking out those investments separately from Ford’s other automotive businesses, a move that will help the market better “grade” their progress and performance. He said this could reflect a strategy employed by Alphabet Inc., Google’s parent company.
“Rightly or wrongly, investor perception of Ford is they are throwing around capital on various investments, some of which can be done by the (auto) supply base,” Mr. Spak said.
With auto industry profits peaking amid slowdowns in the U.S. and Chinese markets, Ford is struggling to convince investors of the company’s long-term growth prospects, despite investing billions in mobility ventures and technologies such as autonomous cars.
Ford’s share price once again slipped below $11 midafternoon Friday, trading at $10.91 a share. That is down nearly 40% from when Mr. Fields took over in mid-2014.
John Murphy, an analyst at Bank of America Merrill Lynch, said Ford is taking a longer view than many of its competitors and, while that may yield little payoff in the stock price in the short term, investing in new technologies is a “necessary burden” for survival.
“The message coming out of the meeting this morning was, in our view, generally constructive, consistent with prior commentary,” Mr. Murphy wrote in his Friday research note.
Source: The Wall Street Journal