Ahead of the Bell: JPMorgan downgrades Ford on share price
NEW YORK—JPMorgan downgraded Ford Motor Co. Friday, saying a recent stock jump after better-than-expected earnings brings shares close to their fair value.
Analyst Himanshu Patel cut his rating to "Neutral" from "Overweight" after shares climbed 12 percent after the carmaker surprised the market Thursday with a $100 million first-quarter profit.
The stock is up about 25 percent so far this year.
The results showed "solid underlying improvement" at Ford, Patel said. But the company seems undervalued by only 10 percent -- a level not justified by the current economic slump, he said.
Ford sales have been battered in recent quarters by the slowing North American economy, as consumers deal with rising fuel costs and the credit crisis.
Patel raised his 2008 estimate to a loss of 75 cents per share from a loss of $1.05 per share. Analysts polled by Thomson Financial expect, on average, a loss of 42 cents per share for the year.
Ford shares fell 26 cents, or 3.1 percent, to $8.14 in premarket trading. They closed at $8.40 on Thursday.
