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Ford stock drops after price target on shares falls


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Ford stock drops after price target on shares falls



Ford’s stock dropped 12 cents today after a Goldman Sachs analyst cut his price target on Ford shares by $2 due to growing concerns that industry sales during the second half of the year won’t meet expectations.

Goldman Sachs analyst Patrick Archambault cut his price target on Ford to $14 from $16. He also reduced his 2010 forecast for U.S. auto sales to 11.7 million from 12 million.

Ford’s stock closed at $10.16 per share today, down 1.2% from Friday.

Still, Archambault said in his report that he continues to recommend Ford as a buy because the company’s turnaround plan is ahead of schedule.

Ford stock price remains stalled even though it surprised Wall Street last week by paying off more than $4 billion of its debt.

Since then, Ford’s stock has risen 28 cents from $9.88 per share.

Ford’s surprise debt payment failed to boost its stock price because it was followed by news Thursday that the industry’s seasonally adjusted annual rate declined in June to 11.1 million from 11.6 million in May, feeding concerns that the U.S. economic recovery might be stalled.

The SAAR indicates what sales would total for the year if demand remained constant over 12 months, adjusting for seasonal factors.

Most analysts and industry executives had hoped that promising sales trends in May would carry over into June and lead to a mild sales recovery for the year.

Barclays Capital analyst Brian Johnson said that the weak current sales pace is likely to drag down stock prices across the automotive sector for the next few weeks.



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