Equity valuation of Ford Motor Company

Abstract

This study analyzes and evaluates the Ford Motor Company, one of the world’s largest automobile manufacturers. The company valuation as of August 31, 2025, was conducted using two methods: a Discounted Cash Flow (DCF) analysis and a Relative Valuation (multiples). Within a Sum-of-the-Parts (SOTP) approach, both methods were used to separately evaluate the different business segments Ford Automotive and Ford Credit and to appropriately represent their specific risk and cash flow profiles. The valuation results in a fair stock price of USD 14.00, representing an undervaluation of approximately 11.7% compared to the current market price of USD 11.90. Based on this, a clear “Buy” recommendation is issued. Particularly crucial are the strategic transformation plan Ford+, with which Ford is driving the transition to electromobility, digital services, and software-based business models, as well as the strong market position of profitable segments like Ford Blue and Ford Pro. High investments and current losses in the Model e sector do weigh on profitability in the short term, but they are crucial for future competitiveness. The results are compared with external analyst reports. Morningstar assigns a higher target price of USD 16, while Zacks sets its estimate at USD 12. These findings confirm the conclusion of this thesis: Ford’s stock remains undervalued by the market and offers attractive upside potential.

Date of Award	14 Oct 2025
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)