Shares of Ford Motor Co. surged to a five-year high Wednesday after a ratings agency upgraded the automaker's debt and said Ford has the potential to improve its finances further.
DETROIT - Shares of Ford Motor Co. surged to a five-year high yesterday after a ratings agency upgraded the automaker's debt and said Ford has the potential to improve its finances further.
The Dearborn, Mich., automaker's stock hit $14.15 per share in afternoon trading, a 4.9 percent surge to levels not seen since January, 2005. It closed at $14.10, up 61 cents, or 4.5 percent.
Moody's Investors Service raised its ratings on Ford's debt, as well as the debt of Ford Motor Credit Co., which makes loans to dealers and customers.
Still, Ford shares were already on the rise as the automaker benefits from increased quality rankings and the fact that it didn't take federal aid like General Motors Co. and Chrysler Group LLC.
In recent history, Ford shares closed as low as $1.26 on Nov. 19, 2008, the lowest since Nov. 24, 1982, when they closed at $1.25.
One hundred shares purchased for $126 at the 2008 low would now be worth $1,410.
In January, Ford defied a slow economy that sent its U.S.-based rivals into bankruptcy protection, posting a $2.7 billion profit for 2009. It was the automaker's first annual profit in four years.
Moody's yesterday said Ford is performing better than expected. The ratings agency is now reviewing Ford for another upgrade.
"Ford clearly has a much more robust and competitive business model that is capable of supporting significant improvement in performance over time," Bruce Clark, Moody's senior vice president, said in a statement.
Moody's predicted Ford's business model will generate significantly improved financial performance, fueled by new products.
Several Ford models now consistently score above Honda and Toyota in widely followed rankings by Consumer Reports magazine, and the magazine's editors have declared that Ford is now making some vehicles with world-class reliability.