Deutsche Bank maintains Hold rating on Ford Motor, focusing on commodity cost pressure

Overview

This report is Deutsche Bank's preview of Ford Motor Company's 1Q26 results, with a core focus on commodity costs, especially the impact of rising aluminum and steel prices on the 2026 profit and free cash flow outlook. The report believes 1Q26 results may be broadly in line with expectations, but higher cost exposure in the second half could lead the company to adopt more cautious wording on full-year EBIT and FCF guidance.

Core views

Deutsche Bank expects Ford's overall corporate EBIT in 1Q26 to be USD 1.2 billion, basically flat sequentially versus 4Q25. By segment, Ford Blue EBIT is expected at USD 633 million, Ford Model e is expected to post a loss of USD 1.01 billion, and Ford Pro EBIT is expected at USD 1.2 billion. Due to the sharp rise in aluminum and steel prices after the Middle East crisis, the report believes Ford's 2026 EBIT guidance of USD 8-10 billion and FCF guidance of USD 5-6 billion face downside pressure, and it cuts its 2026 consolidated EBIT forecast from USD 9.2 billion to USD 8.6 billion.

Analysis framework

The report uses an earnings preview and segment forecasting framework, comparing EBIT forecasts for business units such as Ford Blue, Ford Model e, and Ford Pro with consensus expectations, while also assessing whether the cost bucket is moving toward the upper end of the original guidance range based on changes in aluminum and steel spot prices. On valuation, Deutsche Bank continues to use 2026 EBITDAP multiples and Ford Credit valuation multiples to support its USD 12 target price.

Methodology notes

• Valuation methodsMultiple-based valuation

  3.0x 2026 EBITDAP and 6x Ford Credit

  The report states that maintaining the Hold rating is still based on 3.0x 2026 EBITDAP and a 6x valuation for Ford Credit.

• Earnings forecastSegment EBIT forecast

  Operating profit broken down by Ford Blue, Ford Model e, and Ford Pro

  The report evaluates whether 1Q26 results will meet expectations through segment EBIT forecasts and compares them with market consensus expectations.

• Cost analysisCommodity price sensitivity watch

  Pressure from rising aluminum and steel prices on 2026 cost and profit guidance

  The report uses QoQ and year-to-date changes in aluminum and steel spot prices to judge second-half commodity cost exposure.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Ford Motor Company (F.US)

  Research target

  Strengths

  The North American product lineup will continue to be refreshed, and a hybrid and more flexible powertrain strategy may be superior to simply betting on pure EVs; the company still targets an 8% adjusted EBIT margin by 2029.

  Weaknesses

  Ford Model e remains loss-making, rising commodity costs compress 2026 profit potential, and execution efficiency after the EV organizational restructuring has yet to be validated.

  Comparison

  Deutsche Bank's 2026 EBIT forecast is USD 8.6 billion, below its previous USD 9.2 billion forecast and slightly below the market consensus expectation of USD 8.7 billion.

  Risks

  Continued rises in aluminum and steel prices, management changes slowing decision-making, weaker-than-expected EV platform integration, and lower-than-expected North American product refresh and cost improvement.

• Ford Blue

  Core traditional automotive business segment

  Strengths

  After integration with the global industrial system and EV technology, it may achieve efficiency improvements, and product lineup refreshes should support medium-term competitiveness.

  Weaknesses

  It remains affected by the traditional auto cycle, commodity costs, and the pace of product updates.

  Comparison

  The report expects 1Q26 EBIT of USD 633 million, above the market consensus expectation of USD 446 million.

  Risks

  Insufficient cost improvement, rising steel and aluminum prices, and execution risk in product replacement cycles.

• Ford Model e

  EV business segment

  Strengths

  The UEV platform and internally developed user experience, hardware, and OTA capabilities lay the foundation for long-term electrification.

  Weaknesses

  A loss of USD 1.01 billion is still expected in 1Q26, and EV asset impairments reflect a clear shift in market expectations versus several years ago.

  Comparison

  Deutsche Bank expects a loss of USD 1.01 billion, versus the market consensus expectation of a USD 952 million loss.

  Risks

  Weaker-than-expected EV demand, organizational integration slowing innovation, and uncertainty around third-party autonomous driving partnerships.

• Ford Pro

  Commercial vehicle business segment

  Strengths

  It is expected to remain an important profit contributor, with 1Q26 EBIT forecast at USD 1.2 billion.

  Weaknesses

  The report forecast is below the market consensus expectation of USD 1.45 billion.

  Comparison

  Ford Pro's forecast profit is higher than other segments, but weaker relative to consensus expectations.

  Risks

  Commercial demand fluctuations, rising costs, and changes in product mix.

Key data

• Current share priceUSD 12.44As of April 16, 2026.
• Target priceUSD 12.00Deutsche Bank maintains the target price.
• 52-week rangeUSD 14.43-9.47Disclosed on the report cover page.
• 1Q26 corporate overall EBIT forecastUSD 1.2bnDeutsche Bank expects overall 1Q26 results to be broadly in line with expectations.
• Ford Blue 1Q26 EBIT forecastUSD 633mMarket consensus expectation is USD 446m.
• Ford Model e 1Q26 EBIT forecast-USD 1.01bnMarket consensus expectation is -USD 952m.
• Ford Pro 1Q26 EBIT forecastUSD 1.2bnMarket consensus expectation is USD 1.45bn.
• 2026 consolidated EBIT forecastUSD 8.6bnBelow the previous forecast of USD 9.2bn and close to the market consensus expectation of USD 8.7bn.
• Original 2026 EBIT guidanceUSD 8bn-10bnThe report believes the company may lower it or point to the low-to-mid end.
• Original 2026 FCF guidanceUSD 5bn-6bnRising commodity costs may create pressure.
• Aluminum price change1Q26 +13% QoQ；2Q26 YTD +11%The report mentions a significant rise in aluminum prices after the Middle East crisis.
• Steel price change1Q26 +11% QoQ；2Q26 YTD +6%The report believes cost exposure will be higher in the second half.

Impact & implications

In terms of investment implications, Ford's near-term earnings may not deviate significantly from expectations, but full-year profit elasticity is more affected by commodity prices, making management's wording on 2026 guidance key to the stock's reaction. In the medium term, the company is integrating its EV technology team with its global industrial system while maintaining its target of an 8% adjusted EBIT margin by 2029; however, this path requires ongoing cost improvement, product mix refresh, and execution of its electrification strategy. The report therefore maintains a neutral stance rather than upgrading the rating.

Risks

• Continued increases in commodity prices such as aluminum and steel, putting further pressure on 2026 EBIT and FCF.
• The company may lower full-year guidance or point the original USD 8-10 billion EBIT guidance toward the low-to-mid end.
• Doug Field's departure and adjustments to the EV, digital, and design organizations may affect the pace of execution.
• Integrating the UEV platform with the global industrial system may improve efficiency, but it may also on net slow decision-making.
• There is uncertainty around the pace of narrowing losses at Ford Model e, EV demand, and strategic execution after asset impairments.
• Product lineup refreshes, the hybrid strategy, and the 2029 target of an 8% adjusted EBIT margin require strong execution.

What to watch

• Whether actual 1Q26 EBIT and segment performance for Ford Blue, Ford Model e, and Ford Pro match Deutsche Bank's forecasts.
• Whether management lowers 2026 EBIT or FCF guidance, or signals the low-to-mid end of the original guidance range.
• The extent of price locking and cost pass-through for aluminum and steel prices in 2H26.
• After the EV organizational restructuring, the development pace of the UEV platform, midsize pickups, the next-generation F-150, and Super Duty.
• Progress toward refreshing 80% of the North American product mix by volume and 70% of the global product mix by 2029.
• Progress toward 90% of vehicles adopting an updated electrical architecture, in-house user experience, and next-generation OTA capabilities by 2030.
• The rollout of BlueCruise, Ford Digital Experience, and potential third-party autonomous driving partnerships.