Ford stock up 2.1% on news of new CEO

Melissa Burden
The Detroit News

Ford Motor Co. stock was up modestly Monday on news that company CEO Mark Fields has been ousted and Jim Hackett, chairman of the company’s Ford Smart Mobility subsidiary, will take over.

Shares closed up 2.1 percent Monday to $11.10, on a day when major stock indexes were up about a half-percent. Ford’s stock closed Friday at $10.87 a share. Shareholders have been frustrated by the sagging stock price, which under Fields’ watch as CEO for nearly three years has fallen about 40 percent.

Ford names Jim Hackett CEO, replacing Mark Fields

Analysts are mixed on whether the news of a new CEO alone will do much for the stock, however.

Citi research analyst Itay Michaeli, in a Monday note to investors, said appointing Hackett as CEO likely suggests “a greater emphasis to accelerate Ford’s mobility services development and strategy.”

Fields’ run as Ford CEO ends amid need to 're-energize'

Michaeli said Citi has questions on this such as whether Ford will boost its focus from “dynamic” shuttles to personal transportation and car-sharing and if that could mean more mergers, acquisitions or partnerships with companies such as Uber Technologies Inc. and Lyft Inc. Citi also has questions about whether Ford will accelerate or change its approach to self-driving vehicle development.

Evercore ISI analyst Arndt Ellinghorst in a note to investors Monday, said it expects market reaction to be neutral.

“While Ford’s relative earnings performance has underwhelmed investors of late, Hackett is less well-known among auto investors than other members of Ford’s management team,” Ellinghorst said in the note.

“Meanwhile, should Hackett be appointed, given his present role as Chairman of Ford Smart Mobility, investors will question whether this means Ford is looking to expedite and increase its investments in future technologies? Though fears around industry disruption persist, it is not clear to us that this is what investors are looking for at this point in the cycle.”

George Galliers, another analyst with Evercore ISI said Hackett must “quickly articulate his plans for investors to gain greater confidence in the company and its story.” Galliers said Hackett must address with stockholders how he plans to reverse Ford’s recent earnings slide and detail his strategy in electrification and mobility.

Consumer Edge Research LLC senior analyst James J. Albertine, in a note to investors Monday, said replacing Fields with Hackett shows the board “agrees in principle with the view that investors need to hear more about monetization strategies around connectivity and mobility solutions, and perhaps this is the type of change needed to send that message and to emphasize tangible opportunities and simplify the discussion around investments in this arena.”

(313) 222-2319