Long-suffering Ford shares reach 20-year high

DETROIT — The last time Ford Motor Co. shares were worth this much, Jim Farley was climbing the executive ranks at Toyota, Apple was about to reveal a handheld music player called the iPod, and air travelers didn't have to take off their shoes at security. Ford, fresh off the scandal surrounding Explorers fitted with defective Firestone tires, was a month away from firing Jacques Nasser as CEO.

The automaker's long-languishing stock hit $19.72 in morning trading Friday, touching its highest level since September 2001 and having nearly tripled in value during Farley's 13 months as Ford's top executive. The shares retreated later in the day, finishing down 0.67 percent to close at $19.29.

Shares had steadily slipped since Alan Mulally retired in 2014, a trend that factored heavily into the ouster of Mark Fields in 2017. They briefly dipped below $5 at the onset of the coronavirus pandemic last year and closed at $6.66 the day before Farley took over the top job in October 2020.

Wall Street has taken a shine to Ford's growth plans, which under Farley center around EVs such as the F-150 Lightning and generating recurring revenue from subscription services.

Farley and other top executives outlined the strategy in a May capital markets day presentation, a practice that had stopped under Farley's predecessor, Jim Hackett.

"2021 has been truly a breakthrough year for Ford ... easily the most important year strategically for the company since the financial crisis," Morgan Stanley analyst Adam Jonas, who publicly sparred with Hackett during his CEO tenure for a lack of transparency, said in an investor note in late October. "Ford is convincing the stock market that they have a viable future."

The latest stock surge comes after Ford last week reported a 24 percent decline in third-quarter net income but increased its guidance and reinstated its shareholder dividend. This week, Ford made a push to regain the investment grade rating it lost at the start of the pandemic by announcing a plan to retire up to $5 billion in high-interest debt and tap into the fast-growing market for "green" bonds to help it finance new EVs and extend credit to customers with lower scores.

Ford isn't the only traditional automaker feeling the love.

Shares of General Motors hit a post-bankruptcy high of $64.30 in June and are hovering around $60 this week. GM shares fell 0.2 percent to close at $58.52 on Friday.

GM also has placed big bets on electrification, commercial vehicles and subscription services. Jonas was similarly effusive following the company's investor day presentations last month, noting that if it were a startup, it would likely have a much higher valuation.

"Overall, we were left with a sense of great capability at the company but still many unanswered questions regarding execution," Jonas wrote. "While so many company targets tend to be back-end loaded, we believe the next 12 months will prove critical for setting the strategic course for GM's future."