Ford shares topped $ 20 per share for the first time in over 20 years
Ford CEO Jim Farley speaks to reporters in front of the company’s headquarters on May 19 in Dearborn, Michigan, following the debut of the F-150 Lightning electric pickup truck.
Michael Wayland / CNBC
DETROIT – Ford Motor stock surpassed $ 20 a share Monday, for the first time since September 2001, as investors increasingly believe in CEO Jim Farley’s capital recovery plan.
Since Farley took control of the automaker in October last year, Ford shares have risen roughly threefold from below $ 7 a share. Ford shares rose a whopping 5.9% during Monday morning trading to $ 20.42.
Ford shares are up about 127% this year. That’s far more than other automakers like General Motors (up 42%) and Tesla, which grew 68% this year.
Such a rally has eluded the last two Ford CEOs. The stock lag largely contributed to the departure of Farley’s predecessors Mark Fields and Jim Hackett.
Farley did not do one thing, but a series of important steps over the past year or so that have made Ford gain traction with investors again. Actions included in Ford + Farley’s overhaul plan ranged from restructuring the automaker’s management team to announcing billions of dollars in autonomous and electric vehicles.
“We see clear evidence of significant changes currently taking place at Ford and of what happened in a very short period of time as Ford set a new record for financial performance and showed that its transition to EV / AV / digital technology“ the world has accelerated dramatically “Credit Suisse analyst Dan Levy said in a recent note to investors.
Most recently, Ford announced plans on Thursday to buy back up to $ 5 billion of its high yield bonds as part of a broader plan to restructure its balance sheet.
Farley told CNBC last month that Ford shares “absolutely” have more room to trade as the recovery plan continues.
“There is growing confidence that Ford will be one of the winners of this new digital transformation in the industry,” he said during a telephone interview regarding plans to invest $ 11.4 billion in electric batteries and vehicles in the United States. “We have a lot of incredible benefits.”
In addition to a tougher move to electric vehicles and a repair plan, Farley has hired high-level executives for the automaker. They include Doug Field, a former Tesla and Apple executive, and Mike Amend, who was most recently president of Lowe’s online business.