Buy the dip on Ford as aluminum fears are ‘overblown’, says UBS
Concerns around aluminum and gas prices have weighed too much on Ford Motor , making it a prime target for investors to buy on the dip, according to UBS. The investment bank upgraded the automaker to buy from neutral. It maintained its $15 price target on shares, suggesting 23.4% upside from Monday’s close. “Investors have been very focused on the impact of aluminum prices for Ford. However, we believe concerns are overblown,” analyst Joseph Spak said in a note to clients. The automobile maker has used aluminum in the body of some of its trucks, including the Ford F-150, for years. But its reliance on the material has raised concern among some investors as London Metal Exchange spot aluminum prices have risen roughly 16% since the Iran war began, according to UBS. During the same time, shares of the automaker have fallen 13.7%. F mountain 2026-02-27 Ford shares have slid by double-digit percentage points since the end of February. On top of that, two fires broke out at Novelis’ aluminum plant in New York late last year, leading to aluminum price spikes and supply constraints. Last fall, Ford told investors that the first of those two incidents stood to reduce its profits by up to $2 billion. However, investors shouldn’t fret over any potential aluminum-related hits to the business, according to UBS. “We believe Ford has ‘hedged’ their aluminum exposure for this year,” Spak wrote. “Further, steel has already been on ‘contract’ or set for 2026. Thus we see little risk to Ford’s guidance that called for $1bn y/y headwind from commodities (which primarily consisted of steel, aluminum and memory pricing).” The analyst added that Ford will see strong earnings in the years to come. “Beyond 2027, we see F embarking on a march towards $3 in EPS power driven by product portfolio, a more lenient U.S. regulatory backdrop combined with a more pragmatic EV strategy, an emerging battery energy storage system (BESS) opportunity, and more focus on higher margin Pro software,” Spak wrote. Shares are down 7% in the year to date, underperforming the overall market.