Jefferies downgraded F to "underperform" from "hold"
Shares of Ford Motor Co (NYSE:F) are down 2.8% at $10.10 at last check today, after a downgrade from Jefferies to "underperform" from "hold." The firm cited, among other things, inventory build-up and an $8.5 billion gap between warranty provisions and cash outflows since 2020. Notably, the analyst kept a more favorable "hold" rating on sector peer General Motors (GM).
In other news today, the U.S. Energy Department finalized a $9.63 billion loan for Ford and South Korean battery maker SK On to construct three new battery manufacturing plants in Tennessee and Kentucky. The Biden administration is prioritizing incentivizing the electric vehicle (EV) sector before Trump's inauguration.
Today's drop has F trading at its lowest levels since August, and dropping below support at $10.30, which has provided a floor for the past few months. Since the start of the year, the equity is down roughly 16%.
Options traders appear to be buying in on the dip, however. So far today, 64,000 calls have been exchanged -- double the amount typically seen at this point -- in comparison to 32,000 puts. The December 10.50 call is the most active contract, followed by the 12 call in the same series.
It might not be a bad idea to bet on a short-term bounce, either. F's 14-day relative strength index (RSI) of 25.5 sits in "oversold" territory.