Ford Motor Company (NYSE:F): Ford Motors is the second largest automobile manufacturer in the U.S. on the basis of revenue and unit sales. This month, Fitch Ratings affirmed a positive outlook on Ford stating that the company has the flexibility to meet the challenges of the current challenging  global scenario. Last month, Barclays Capital analyst Brian Johnson wrote in a note to investors that he maintains his 1-Overweight rating and a $20 per share 12-month price target. Jefferies & Co. analyst Peter Nesvold also kept his $19 price target and BUY rating.

Ford has given mid-decade projections of 2 percent to 3 percent in gross domestic product growth, 15 million to 17 million total U.S. auto sales (last year was 11.6 million) and pre-tax operating margins of 8 percent to 10 percent, compared with 8.4 percent last year. Nesvold viewed this guidance as an incremental positive given the challenges of increasing mix of small cars, rising commodity costs, higher structural costs, and potential competition from new entrants. Johnson wrote that he has not fully incorporated Ford's aggressive targets for growth in Asia, but he sees further improvement in Ford's earnings power. "It remains to be seen if the positive long-term strategies can offset near-term macro concerns," Johnson wrote.

Although Morgan Stanley has maintained its Overweight rating for Ford, it has replaced the company with GM as its favorite in the automobile sector. Morgan Stanley believes that Ford's earnings potential through 2012 doesn't offer as much upside as GM's. It carries a price target of $21 for Ford. Right after the company reported impressive March earnings which trounced rival General Motors for the first time in its history, the company suffered a setback. It had to recall an unprecedented 1.2 million best-selling F-150 trucks due to sudden airbag deployments.

Ford Motor Company currently trades at a price of $13.08. Its 52-week range has been $10.95 to $18.97. This means the stock has an expected upside of 50 percent on current prices if most analyst's target prices are considered. It has a P/E ratio of 7.72. This is a shade lower than the industry average of 8, which means the stock is relatively cheaper than others in the automobile sector. Over the last 12 months, sales have grown by 10.90 percent to $130.50 billion, and income has grown a whopping 141.90 percent to $7.03 billion. On the downside, this year, earnings growth is expected to fall by about 4.41 percent compared with the industry's positive growth rate of 17.4 percent. Ford is expected to declare consolidated earnings of $1.87 per share compared with $1.91 last year. For 2012, the outlook improves and analysts expect the company to declare earnings in the range of $1.97.