Ford Motor attracts a bull call from Goldman Sachs on margin opportunity

Ford Motor Company (NYSE:F) revved higher in early trading on Tuesday after Goldman Sachs boosted its rating on the Detroit automaker to Buy from Neutral.

The firm turned bullish on Ford (F) with the view that there is a margin opportunity driven by the company’s more profitable commercial business and growing software and services mix.

Analyst Mark Delaney and his team believe that software and physical services for Ford (F) could account for more than $2 billion of EBIT in 2025 and over $4 billion in 2030. “While calculating the effect on total company EBIT can be somewhat difficult with the EV business currently negative, we see these levels of profit and profit contribution as consistent with multiple expansion from our tech industry case studies,” highlighted Delaney

In addition, Ford Pro is anticipated to have more revenue and profit opportunities. Crucially, Delaney said cost efficiencies in Ford’s (F) electric vehicle unit could offset some headwinds with the business. Finally, Ford’s (F) comprehensive supply chain and portfolio are seen as a potential competitive advantage within the broad automobile industry,

Goldman Sachs assigned a price target of $13 to Ford (F).

Shares of Ford (F) were up 2.46% in premarket trading on Tuesday to $10.82 vs. the 52-week trading range of $9.49 to $14.85. Ford (F) is expected to issue its Q3 U.S. sales report this week.