Here's Why Ford Motor Stock Is a Buy Before May 5

Rich Smith, The Motley Fool

Thu, May 1, 2025, 10:35 AM 5 min read

• The major U.S. automaker reports first-quarter earnings on Monday, May 5.

• Analysts expect it to report $0.02 per share, a very low earnings target to beat.

• Ford stock is cheap and pays a great dividend, which should please investors.

The countdown has begun. In just five days, on Monday, May 5, Ford Motor Company (NYSE: F) will report its Q1 2025 earnings, and attempt to repeat the earnings beat that archrival General Motors turned in this past Tuesday. Can Ford do it?

It shouldn't be hard. According to analysts polled by Yahoo! Finance, Ford only needs to earn a bare $0.02 per share to meet expectations next week, a much lower bar than the $0.49 per share the company earned a year ago. Ford can even admit to a 10% drop in revenue, and not miss its mark. Analysts only expect the company to report sales of $35.8 billion.

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When you consider that automotive rival GM reported both sales and earnings growth, but everyone's expecting Ford to drop on both top and bottom lines, the threshold for outperformance has been set, really, really low. Ford should be able to "Evel Knievel" these forecasts with three wheels tied behind its back.

That's not to say Ford cannot miss earnings. President Trump's tariffs policy -- or policies I should say, since they seem to change by the day -- have injected a sizable amount of uncertainty into the automotive market. Just because the trade war didn't prevent GM from beating expectations last quarter, it doesn't necessarily mean Ford will emerge unscathed.

It's also possible that Ford might fumble a positive earnings report by issuing bad guidance, and perhaps be overly cautious in predicting the earnings it will make in Q2, or later in the year. That could scare investors away from the stock no matter how the earnings turn out. Ford wouldn't even necessarily be wrong to take a cautious tone, either.

As Bank of America warned last week, uncertainty as to the medium-term effect of tariffs is "extremely elevated," and really, no one knows for certain how this is all going to play out.

All this being said, I'm still confident that Ford stock is a buy ahead of earnings -- even lacking any special knowledge as to what those earnings will be. How?

Consider the stock price. Since President Trump launched his "reciprocal tariffs" trade war last month, shares of Ford stock have hardly budged at all. They entered the month of April at $10.03 per share. They exited the month trading for $10.01. Considering all the elevated uncertainty, and the automotive sector's starring role in the tariffs debate, you'd expect the stock to have performed much worse if there was any "fluff" at all in the stock's valuation.