Ford shares close lower on Wednesday, auto maker to exit Russia’s passenger vehicle market

Ford Motor Company (F) said on Wednesday that its joint venture with Sollers in Russia planned to shut down two assembly factories and one engine plant in the country, while the US manufacturer would exit local passenger vehicle market.

Plant closures will result in “significant” job losses, Ford said, but however, no details were provided.

Ford shares closed lower for the fourth time in the past nine trading sessions in New York on Wednesday. It has also been the steepest daily loss since March 22nd. The stock went down 1.60% ($0.14) to $8.62, after touching an intraday high at $8.86, or a price level not seen since March 19th ($8.87).

Shares of Ford Motor Company have risen 12.68% so far in 2019 compared with an 11.91% gain for the benchmark index, S&P 500 (SPX).

In 2018, Ford Motor Co’s stock plummeted 38.75%, thus, it underperformed the S&P 500, which registered a 6.24% loss.

The decision comes as part of a restructuring program, according to which Russia’s Sollers is to take control of the joint venture with Ford that was established in 2011. Ford and Sollers each hold a 50% stake in the venture, but, up until now, the US auto maker has been in control of the company.

A reorganized Ford Sollers entity is to focus on commercial vehicles, while production of passenger vehicles is expected to be discontinued by the end of June, the two companies announced.

“The new Ford Sollers structure supports Ford’s global redesign strategy to expand our leadership in commercial vehicles and to grow the business in Europe in those market segments that offer better returns on invested capital,” Steven Armstrong, Fords President of Europe, Middle East & Africa, was quoted as saying by Reuters.

According to Ford, Russias passenger vehicle market has been under significant pressure in recent years, with recovery being slower than anticipated. At the same time, a shift to lower priced passenger vehicle segments has been observed.

According to CNN Money, the 18 analysts, offering 12-month forecasts regarding Ford Motor Company’s stock price, have a median target of $9.25, with a high estimate of $12.00 and a low estimate of $6.00. The median estimate represents a 7.31% upside compared to the closing price of $8.62 on March 27th.

The same media also reported that 15 out of 22 surveyed investment analysts had rated Ford Motor Company’s stock as “Hold”, while 5 – as “Buy”. On the other hand, 1 analyst had recommended selling the stock.

Weekly Pivot Levels

By using the traditional method of calculation, the weekly levels of importance for Ford Motor Company (F) are presented as follows:

Central Pivot Point – $8.61
R1 – $8.80
R2 – $9.06
R3 – $9.25
R4 – $9.44

S1 – $8.35
S2 – $8.16
S3 – $7.90
S4 – $7.64