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Ford was upgraded to Ba1 from Ba2 by Moody’s. The primary reasons cited were its expected ability to maintain an improvement in earnings and cash flows, its efforts to improve the profit margin in one of its units, and sound liquidity. Ford’s automotive EBITA margin is estimated to be 4.7% in 2023, significantly higher than the low single-digit figures seen before 2022. The launch of Ford’s Super Duty truck in March is expected to amplify Ford’s earnings in 2023, which will benefit from higher volumes and a net increase in pricing. Ford is also aiming to improve the profit margin in its internal combustion and hybrid vehicles unit, Ford Blue. If successful, this is said to give upside potential in its EBITA margin next year. Finally, Ford is expected to maintain good liquidity as it is a core principle of its financial policy. Its cash and marketable securities totaled $28.6bn as of 31 March 2023 and its free cash flows are forecasted to be $1.4bn in 2023, which is higher than the -$13mn figure it saw last year.
Ford’s 4.75% 2043s have risen 4.1% over the past week and are currently trading at 79.3 cents on the dollar, yielding 6.67%.