Ford Motor Co (F) announced on Wednesday that it intends to cut 1,400 salaried jobs in the United States by the end of 2020 as part of $11 billion restructuring initiative.
The US company said it would offer voluntary buyouts to workers who are eligible for retirement.
Ford shares closed higher for a second consecutive trading session in New York on Wednesday. The stock went up 1.76% ($0.12) to $6.95, after touching an intraday high at $6.97, or a price level not seen since August 27th ($6.98).
Shares of Ford Motor Company have retreated 25.27% so far in 2020 compared with a 10.84% gain for the benchmark index, S&P 500 (SPX).
In 2019, Ford Motor Co’s stock went up 21.57%, thus, it again underperformed the S&P 500, which registered a 28.88% gain.
Last year, the US auto maker cut 7,000 salaried jobs internationally and targeted 12,000 more layoffs and facility closures across Europe.
“We’re in a multiyear process of making Ford more fit and effective around the world,” Kumar Galhotra, Ford’s President, Americas & International Markets Group, said in an email to company employees, cited by Reuters.
“We have re-prioritized certain products and services and are adjusting our staffing to better align with our new work statement.”
The company has said it forecasts a pre-tax profit within the range of $0.5 billion to $1.5 billion during the third quarter and a loss during the fourth quarter. It is also striving to achieve a 10% operating margin in North America.
Analyst stock price forecast and recommendation
According to CNN Money, the 15 analysts, offering 12-month forecasts regarding Ford Motor Company’s stock price, have a median target of $7.50, with a high estimate of $9.00 and a low estimate of $4.90. The median estimate represents a 7.91% upside compared to the closing price of $6.95 on September 2nd.
The same media also reported that at least 13 out of 18 surveyed investment analysts had rated Ford Motor Company’s stock as “Hold”, while 3 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.
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