NEW YORK (AP) — Shares of Ford Motor Co. appeared to be heading for another yearly high Friday, a day after the company doubled its dividend payout to investors.
Sterne Agee raised its price target by $2 to $17 Friday, citing strong vehicle demand in North America and new optimism about prospects in South America.
"In our view the industry in North America will continue to recover in 2013 and in 2014," wrote analyst Michael Ward, who also backed his "Buy" rating on the automaker. "Ford's new product cadence, the benefits of restructuring actions, positive pricing and favorable mix, in our view, will produce record financial results over the next few years."
Ward also boosted his earnings predictions for this year and next by 5 cents per share, predicting a 2013 profit of $1.65 per share and a 2014 profit of $1.90 per share. Analysts polled by FactSet expect earnings per share of $1.46 and $1.85, for those two years respectively.
Production of Ford's small vehicles are expected to pick up this year and into 2014, which should help boost South American sales.
But the timing of the dividend increase surprised some, including Jefferies & Co. analyst Peter Nesvold.
Nesvold said Thursday that the payout suggested that Ford is getting a better handle on how to manage its deteriorating European business.
All automakers are restructuring operations to deal with a stubborn recession in Europe that has sapped demand for automobiles.
In October, Ford closed a major plant in Belgium and a day later, said it would close two plants in Britain.
On Friday, Honda said it would cut about one in four jobs at its U.K. factory.
Ford shares hit their highest level in a year and a half Thursday and before the market opened Friday, shares rose another rose 13 cents to $13.96. Shares last hit that level in July 2011.