Ford Motor's (F) 2025 adjusted earnings before interest and taxes, or EBIT, guidance drew lots of investor attention, but its underlying business is "strong", performing $1 billion ahead of the assumptions provided in Q4, analysts at BofA Securities said in a Friday note.

The company projects adjusted EBIT at $6 billion to $6.5 billion for 2025, down from a previously expected range of $6.5 billion to $7.5 billion. BofA said that the updated guidance implies a "particularly weak" EBIT in Q4, with a large free cash flow burn of $2.7 billion to $3.7 billion.

Analysts said that Ford expects a production cut of 90,000 to 100,000 units due to the fire at the aluminum plant owned by Novelis, which is roughly twice their "worst case" estimate.

BofA said, however, that Ford expects to recover roughly half of the EBIT lost in Q4 2025 in 2026, benefitting from a more "favorable" regulatory environment and potentially lower warranty costs. Analysts said that Ford has a pathway to reach an adjusted EBIT of $8.5 billion to $10.5 billion in 2026.

BofA reiterated a buy rating on the stock and increased its price target to $14.5 from $13.5.

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