Bank of America (BofA) analysts adjusted their credit rating for Ford Motor Company, downgrading to Marketweight from an Overweight. The revision comes as the firm recognizes increasing pressures on Ford’s credit profile, which have been intensified by the additional costs stemming from tariffs.
Despite the current cheap valuations of Ford shares in comparison to its industry peers, BofA suggests that the prices are nearing fair value when the potential impact of a CreditWatch Negative (CWN) action by S&P Global Ratings is taken into account. While the timing of such a move by S&P is uncertain, BofA indicates that it could be imminent and seems likely based on S&P’s established criteria.
The downgrade also follows Ford’s recent decision to suspend its full-year financial guidance for 2025, a move that BofA found understandable but not reassuring, especially in light of competitor General Motors providing its own full-year guidance. Ford has announced plans to update its full-year 2025 guidance during the second quarter earnings call of 2025.
Investors are now alerted to the possibility of technical pressure on Ford’s stock, which could arise from the anticipated S&P rating action. BofA’s reassessment reflects a cautious stance towards Ford’s near-term financial outlook amidst the current economic environment.
The automotive giant is expected to provide more detailed insights into its financial trajectory and respond to the current credit concerns during its upcoming earnings call, where it will offer an updated full-year 2025 forecast.
