Ford falls, Amazon advances pharmacy pursuits and Disney board member speaks – our takes the news
Ford Motor kept its 2024 guidance unchanged Tuesday. Meanwhile, Amazon 's pharmacy efforts added another wrinkle and Disney 's newest board member weighed in on the proxy fight underway at the entertainment giant. Here's a closer look at these headlines and our takes on each. F YTD mountain F stock performance year-to-date. The news: Ford CFO John Lawler on Tuesday reiterated the company's 2024 operating guidance at the Bank of America Securities Auto Summit. Ford still expects to earn between $10 billion and $12 billion in adjusted earnings before interest and taxes, or EBIT; generate adjusted free cash flow between $6 billion and $7 billion; and spend between $8 billion and $9.5 billion on capital expenditures — just as the company offered in early February alongside its 2023 fourth quarter results earlier this month. Club take: Shares of Ford were hit hard Tuesday, falling 3.6%, even though rival General Motors advanced 1% in the session. The divergence in stock performance was not great to see. At the time Ford first issued its guidance, we perceived it as upbeat. The fact it was reiterated Tuesday suggests management's efforts to cut about $2 billion in costs are on track, and its scaled-back EV investments and intensified focused on hybrids are going as planned. Indeed, Ford's February sales figures showed plenty of momentum in the hybrid market. Ford got back on track with its February earnings report, but going forward we still need to see consistency in profits, cash flows and quality control, while managing losses in its electric vehicle division. Following Ford's fourth-quarter earnings print, we raised our price target on Ford shares to $15 from $13. "It's time for Ford to break out," Jim Cramer said in Monday's Homestretch. Investors are set to get another update on Ford's business strength April 24, when the automaker reports its 2024 first quarter numbers after the close. AMZN YTD mountain AMZN stock performance year-to-date. The news: Amazon on Tuesday launched same-day delivery of prescription medication for customers in New York City and the greater Los Angeles area. The service — offered through Amazon Pharmacy launched in 2020 — is part of the company's efforts to provide "the fastest and most convenient service for the home delivery of prescriptions," said Doug Herrington, CEO of Worldwide Amazon Stores, in a press release. Medications for flu, diabetes and other common conditions are available through the service, Amazon said. To help offer the swift delivery, Amazon said it is leveraging artificial intelligence "to help pharmacists fill prescriptions quickly and accurately." The e-commerce giant plans to expand same-day medicine delivery to more than a dozen cities by year-end. The service has been available to customers in Seattle, Miami, Indianapolis, Phoenix and Austin, Texas. Club take: Amazon's expansion of same-day delivery of prescription medication is another sign of the company's focus on innovating in health care. And we're always encouraged by efforts to boost the value of a Prime subscription. Financially, Tuesday's announcement is not really a needle mover. Nevertheless, the ability to offer same-day delivery for prescriptions spotlights Amazon's logistics and delivery prowess. For its traditional e-commerce business, the company has wisely streamlined its fulfilment network to reduce delivery times and overall cost of delivery, helping it make more money. In general, we feel good about our Amazon position, particularly in light of its relationship with Nvidia on AI, as Jim detailed in his Sunday column . DIS YTD mountain DIS stock performance year-to-date. The news: The newest member of Disney's board, Morgan Stanley Executive Chairman James Gorman, offered his perspective on the entertainment company's proxy fight in an interview with CNBC. "A lot of this fight seems to be looking backwards. I'm more interested and why I joined the board in looking forwards," Gorman said. His comments come ahead of Disney's annual meeting, set for April 3, where Trian Partner's Nelson Peltz is seeking a board seat along with former Disney CFO Jay Rasulo. When pressed with Disney's stock underperformance against the broader market and its competitors in recent years, Gorman's justification was the "period of major disruption in this industry" from linear to streaming while navigating through the challenging post-pandemic environment. With CEO Bog Iger back at the helm, the company is "turning that around. Its evidenced by the performance in the stock," Gorman explained. Shares of Disney are up nearly 33% year to date, but the stock has dramatically underperformed the S & P 500 over a five-year period. In that time frame, its cumulative total return is 9.7% compared with 100.2% for the S & P 500, according to FactSet. Club take: We've been supporting Peltz in his push to have two seats on Disney's board. We believe Peltz will be critical in creating shareholder value and reviving losses in Disney's underperforming businesses given his governance experience at consumer companies over the years such as Procter & Gamble , Wendy's , Heinz , and Unilever . In our minds, the pressure Peltz has been putting on Disney through this proxy battle has already helped motivate management and contributed to the stock's strong performance lately. Shares of Disney made a new 52-week high Tuesday and closed at just under $120 apiece. As discussed on Monday's Morning Meeting, we would consider trimming our position if we weren't restricted, given the stock's year-to-date gains. (Jim Cramer's Charitable Trust is long F, AMZN, DIS. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. 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Ford CEO Jim Farley poses for a photo before announcing at a press conference that Ford Motor Company will be partnering with the world's largest battery company, China-based Contemporary Amperex Technology, to create an electric vehicle battery plant in Marshall, Michigan, on Feb. 13, 2023, in Romulus, Michigan. Bill Pugliano | Getty Images