S&P Revises Ford Outlook to Stable, Forecasts 7.8% Margin in 2028
Key Facts
S&P Global Ratings on Tuesday, November 3, 2026, revised its outlook on Ford Motor Company and its financing arm to stable from negative, signaling an improved assessment of the company’s profitability trajectory and ability to withstand pressures. The agency affirmed the long-term credit ratings of both Ford and Ford Motor Credit at BBB-. The decision reflects the agency’s expectation, as reported by Benzinga via Stocktwits, that structural cost cuts and narrowing electric-vehicle losses will support future results. It also expects earnings from trucks and SUVs to offset pressure from inflation, tariffs and supply-chain volatility. The revision follows Ford’s third-quarter results and its decision to raise the low end of its full-year adjusted operating profit forecast.
S&P expects Ford’s margin to reach 5.7% in 2026, then rise to 7.3% in 2027 and 7.8% in 2028. The estimates point to a gradual upward path in margins over the three years, while the agency said it expects adjusted core margins to remain within a 7% to 8% range over the next few years. The agency linked this outlook to the company’s efforts to cut costs and improve its product mix and pricing. It said Ford had reduced material and warranty costs, offsetting higher commodity costs with better pricing and product mix. The report added that the company expects these improvements to continue contributing.
Ford reported revenue of $49.5 billion in the third quarter of 2026, down 2% year over year, while adjusted operating profit was $2.7 billion and adjusted free cash flow was $4.7 billion. Adjusted diluted earnings per share were $0.49, compared with $0.45 in the third quarter of 2025. In the electric-vehicle segment, the Model e unit posted an operating loss of $1.1 billion, but improved 25% from a year earlier. Ford Pro, which includes commercial vehicle operations, reported operating profit of $1.7 billion, down 16% year over year. The company ended the quarter with total liquidity of $46.4 billion, including $25.3 billion in cash.
Ford raised the low end of its 2026 adjusted operating profit forecast to $10.5 billion and set a range of $10.5 billion to $11 billion, while keeping its adjusted free cash flow forecast at $6 billion to $7 billion. The company said its 2026 plan includes cutting material and warranty costs by $1 billion, offsetting headwinds from commodity costs of about $2.5 billion year over year. The cost-control efforts align with Ford’s goal of reaching an adjusted operating profit margin of 8% by 2029. The company also cited record growth in software and parts services, saying these businesses are expanding revenue sources beyond vehicle sales. These indicators reinforce the backdrop to the agency’s decision, while its assessment of execution risks remains tied to the company’s ability to continue improving efficiency and margins.
The stable outlook does not eliminate competitive risks: the report pointed to the possibility that Ford could lag foreign rivals, particularly Chinese automakers, if its new universal electric-vehicle platform fails to achieve reasonable production volumes. This means that narrowing losses in the electric-vehicle business does not remove the challenge of scaling production and competing with companies advancing in this market. In the market, Ford shares closed at $12.60 on November 2, then fell 1.71% to $12.39 in early trading on November 3. The share move places the credit decision in the context of a session in which the price declined, without determining on its own the effect of the outlook revision on trading. Investors will continue to monitor Ford’s ability to execute its product and capacity plans in coming periods.
Ford’s plans include launching the Fathom vehicle in the fourth quarter of 2027, alongside bringing 20 gigawatt-hours of annual capacity online at Ford Energy by the end of that year. The company aims to reach the full run rate for that capacity in the third quarter of 2028. These dates mark later execution milestones in the company’s plan, alongside the margin improvement S&P expects through 2028. The agency also ties its stable outlook to continued reductions in electric-vehicle losses, while competitive risks remain if the new platform fails to reach suitable volumes. The results of executing these plans will determine Ford’s ability to keep converting cost cuts into higher profitability.