Ford (F) Picks Up Another Bull; Citigroup Upgrades to Buy

Ford (NYSE: F) has a new bull in its camp after Citigroup upgraded the shares Monday citing recent underperformance, pricing strength and a likely credit rating upgrade.

The firm upgraded shares from Hold to Buy while maintaining an $18 price target, suggesting 19% upside from Friday's close.

Citigroup highlighted the 10% year-to-date sell-off and underperformance versus the S&P and auto supplies. The underperformance comes despite the firm's view that the shares would likely benefit from Japan-related pricing/share gains. The upgrade also comes amid evidence of firmer pricing and early share gain indications in May.

"Put simply, Ford's pricing and product momentum deserves a premium, not a discount," the analyst said.

In addition the firm sees a credit rating upgrade to investment grade by late-2011/early-2012, which will act as a catalyst for the stock. "A return to investment grade would open a few doors for the equity story including providing a path to refinance secured debt, shed covenants and eventually restore a dividend; as well as improve the long-term funding prospects at Ford Credit," the analyst said.

Shares of Ford are up 0.8% to $15.20 in pre-open trading Monday.

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