Ford Stock Takes a Beating
While the stock market was soaring past its all-time
highs, Ford Motor Company (NYSE:F) seemed to have gotten left behind.
Shares of this Dearborn, Michigan-based automaker fell six percent after its
second-quarter earnings report in July. And then last week, Ford stock took
another beating due to a ratings downgrade.
On Wednesday, August 29, Moody’s Investors Service downgraded
Ford’s credit rating from Baa2 to Baa3, just one notch above junk bond status.
“The downgrade of Ford’s rating reflects the erosion in the
company’s global business position and the challenges it will face implementing
its Fitness Redesign program,” wrote Moody’s in a press release. (Source: “Moody’s downgrades Ford ratings to Baa3; outlook is negative,”
Moody’s Investors Service, August 29, 2018.)
In particular, the rating agency noted several negative
developments at the automaker, including shrinking profit margins in North
America, a slowing business in China, and losses in Europe and South America.
And that’s not all. Moody’s also warned that if things don’t
improve, there could be another downgrade next year:
No comments:
Post a Comment