Ford Motor (F) shares tumbled 7.41% in pre-market trading on Monday, as investors reacted to growing concerns about potential credit rating downgrades for the automotive giant. The sharp decline comes amid broader worries about recessionary risks in the U.S. market, which could significantly impact the auto industry.
According to a market analysis by Candriam, U.S. blue-chip companies, including Ford, Boeing, and Warner, are facing the risk of credit rating downgrades. Such a move could trigger a selloff in U.S. high-yield credit, potentially explaining the significant pre-market drop in Ford's stock price. The analysis suggests that U.S. dollar-denominated credit appears less attractive compared to euro-denominated credit due to tariff-related recessionary risks in the United States.
Despite these concerns, it's worth noting that Ford maintains an average "hold" rating from analysts polled by FactSet, with a mean price target of $9.65. Nomura recently adjusted its price target on Ford to $10.50 from $9.70, maintaining a neutral rating. However, the pre-market plunge indicates that investors are currently more focused on the potential credit risks and broader economic concerns affecting the company.
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