Ford shares gain for a second straight session on Tuesday, $1.05 billion to be invested in auto maker’s South African operations

Ford Motor Co (F) said earlier this week that it intended to invest $1.05 billion in its manufacturing operations in South Africa.

The amount above includes $683 million for technology upgrades and new facilities at Ford’s Silverton-based plant and $365 million for tooling upgrades at major supplier factories.

Ford shares closed higher for a second consecutive trading session in New York on Tuesday. The stock went up 0.28% ($0.03) to $10.86, after touching an intraday low at $10.71 and an intraday high at $11.18 respectively.

Shares of Ford Motor Company have risen 23.55% so far in 2021 compared with a 1.87% gain for the benchmark index, S&P 500 (SPX).

In 2020, Ford Motor Co’s stock went down 5.48%, thus, it underperformed the S&P 500, which registered a 16.26% gain.

As a result of the investments, Ford’s installed capacity in South Africa is to be expanded from 168,000 to 200,000 vehicles.

The increase in production is expected to create 1,200 jobs with the company in South Africa, thus, expanding Ford’s headcount in the country to 5,500 employees.

“It’s the biggest investment in Ford’s 97-year history in South Africa and one of the largest ever in the local automotive industry,” Andrea Cavallaro, operations director of Ford’s International Market Group, said during an announcement event.

The US auto maker also intends to make the facility in Silverton completely energy self-sufficient and carbon neutral by 2024, Cavallaro added.

Analyst stock price forecast and recommendation

According to CNN Money, the 16 analysts, offering 12-month forecasts regarding Ford Motor Company’s stock price, have a median target of $9.50, with a high estimate of $14.00 and a low estimate of $7.10. The median estimate represents a 12.52% downside compared to the closing price of $10.86 on February 2nd.

The same media also reported that at least 12 out of 18 surveyed investment analysts had rated Ford Motor Company’s stock as “Hold”, while 4 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.