Ford Stock Falls On Downgrade

(RTTNews) - Shares of Ford Inc (F) dropped more than 4 percent in midday trading after an analyst at Deutsche Bank downgraded the automaker's stock to Hold from Buy with a $16 price target.

Analyst Rod Lache warned of regulatory costs, stiff competition and falling consumer affordability as among the headwinds Ford would have to grapple with.

According to Lache, not only Ford, but also the overall auto industry face the problems of rising interest rates, with a strong U.S. dollar that tilts the balance in favor of Japanese and other foreign automakers' vehicles, and waning consumer affordability.

While lower fuel costs are a boon for vehicle buyers, still, Lache said, the industry faces unprecedented fuel-efficiency standards that inflate the cost of vehicles, and this coupled with rising consumer interest rates could act as a dampener.

Lache questions, for example, if consumers would pay more for advanced versions of F-150s.

On December 2, Ford reported a 1.8 percent drop in U.S. sales, mainly reflecting the expected impact from the plant changeover for the introduction of the all-new Ford Mustang, F-150 and Transit models. The decline marked Ford's third straight year-over-year decline in monthly sales.

For the year-to-date eleven-month period, Ford's U.S. vehicles sales edged down 0.7 percent to 2.26 million units from the prior year.

F is trading at $14.36, down $0.63 or 4.20%, on a volume of 30.5 million shares on the NYSE.