Ford Motor Company's shares surged by more than 5.7% Thursday, hitting a new 52-week high. The surge sent the 118-year-old company's market valuation over $100 billion for the first time ever.
The manufacturer's stock hit a peak of $25.87 per share, a new 20-year high, before closing at $25.02 per share. The slight dip after trades closed dropped the company's value to around $99.99 billion.
The surge in its stock was partly fueled by reports of the company's plans to accelerate its electrification by increasing its production of its fully-electric models. This will include the retooling of some facilities to produce more models of its Ford Mustang Mach-E crossover electric vehicle and its upcoming electric F-150 pickup, which is due to hit dealerships this spring.
The increased production is part of the company's Ford+ turnaround plan under CEO Jim Farley, who took over in October 2020. Farley previously stated that he plans to quadruple the manufacturing capacity for its F-150 electric pickup to at least 150,000 units. The F-150 Lightning electric pickup is in such high demand that Ford has been forced to suspend taking reservations for the vehicle ahead of its debut at U.S. dealers this spring.
As of its closing price Thursday, Ford is now more valuable than its cross-town rival General Motors, which has a market valuation of around $88.61 billion. Ford is also now more valuable than its electric start-up rival, Rivian Automotive, which is valued at around $77.8 billion. Since its blockbuster IPO in November, Rivian has failed to sustain its growth.
Ford and other vehicle manufacturers are still trailing far behind the current leader in the electric vehicle segment, Tesla, which has a current market capitalization of more than $1 trillion. Following reports indicated that the company had modified its Cybertruck model homepage to remove references to the year 2022, Tesla stock fell 4.7% on Thursday.
Ford's stock is currently being rated as overweight, with analysts pegging its value at an average of $21.83 per share. Morgan Stanley analysts said investors still continue to flock to the stock, particularly as its EV story continues to evolve. Morgan Stanley's price target for the company is $12 per share, with its bull case at about $25 per share.
Analysts said the price movement of Ford's shares has been impressive, and the company has to be given credit for how it has managed to shape the narrative of its electrification to affect its rating. However, analysts warned that significant risks still remain for Ford and the sector as a whole. This includes concerns over the industry's cyclical nature, increased competition, and the challenges in scaling EV production.
