Top Wall Street analyst thinks it might be time to sell Tesla and buy Ford

Ford

  • Morgan Stanley analyst Adam Jonas boosted his target price for Ford to $US15.
  • The carmaker has underperformed the markets amid a US sales boom.
  • Jonas recently also recommended that investors think about taking some profits from Tesla holdings.

The contrast is vivid: over the past three years, Tesla shares have risen 70% while Ford shares have declined 30%. In 2017, Tesla surpassed Ford’s market capitalisation and now has the 100-plus-year-old carmaker out-valued by over $US10 billion.

Ford, of course, has been steadily profitable for that period, although its margins haven’t lived up to expectations. Tesla, meanwhile, hasn’t made a dime and just last year blew through $US3.5 billion in cash.

Figuring out what Tesla is truly worth is a fool’s errand, but Morgan Stanley analysts Adam Jonas seems to think that after the company’s big surge in 2017, some profit taking might be in order. He said as much in a recent research note.

Tesla Detroit sales vs market capAndy Kiersz/Business Insider

And in a note published Wednesday, he argued that Ford’s cheap stock price might represent a buying opportunity. He raised his target price to $US15 (Ford is now at $US11), his first bump up in over two years, and maintained that Ford could be a good bet going into 2018.

He likes the restructuring that CEO Jim Hackett has undertaken, and he thinks the carmaker’s core pickup-truck business will thrive in a US sales environment that could finish the year stronger than expected.

Ford popped higher in morning trading, up over 3%. Tesla slid lower by 2%, to $US335.

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