Ask Matt: Why is Ford doing so poorly?

Q: Why is Ford stock doing so poorly?

A: Ford (F) shares reflect the realization profit growth probably won’t be as strong as it was - and investors want to pay less.

Investors have pushed shares of Ford down 18% this year to roughly $12 a share. Analysts think the automaker’s adjusted profit per share will rise just 2% this year - a significant slowdown from the 66% growth in 2015. Investors see Ford’s revenue rising 3.6% in 2016 - roughly in line with 2015’s top-line growth.

Falling expectations for profit growth are being priced into the stock. Ford  trades for 9.6 times its earnings over the past 12 months, says S&P Capital IQ, down dramatically from its more than 16-times multiple just a year ago. Ford shares now have a P-E that’s below the company’s long-term expected annual growth rate of 15%. Ford’s troubles are more about the stock than the company. The volatile stock market and worries of a global economic slowdown is causing investors to reprice what they think Ford is worth. Analysts have actually been increasing their estimates for what they think the company will earn this year. Analysts expect adjusted profit of $1.97 a share this year, which is 2.6% more than they expected six months ago, says S&P Capital IQ.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.