(Note: The author of this fundamental analysis is a financial writer and portfolio manager.)

Ford Motor Co.'s (F) stock is already down by more than 24% in 2018, well below the S&P 500 gains of almost 9%. But shares of the automaker could be heading even lower, by as much as another 8% based on technical analysis, to its lowest price since August of 2012. That means Ford's stock would be down by 30% on the year. (For more, see also: Ford Options Traders Bet Stock Will Fall 25% This Year.)

The company reported second-quarter results well short of analysts’ estimates. Earnings missed estimates by 11%, coming in at $0.27. The big earnings miss has resulted in analysts cutting their earnings forecast for the rest of 2018 and 2019. But still, analysts have an average price target on the stock almost 20% higher than its current price, which may be far too optimistic.

Technical Downtrend

The technical chart shows Ford currently resting on a long-term downtrend at its current price around $9.50. Should the stock fall below that downtrend, then shares may drop to $8.75, the next level of technical support.

More Sellers

The relative strength index (RSI) has been trending lower since hitting an overbought level above 70 a year ago. The RSI has been trending lower since that time and shows no signs of reversing. It also suggests that shares of Ford continue to fall as well. Volume levels have also been recently rising with the stock price declining, and that may indicate more sellers are entering the name. 

Estimate Reductions

The weaker than expected second-quarter results have caused analysts to cut their full-year outlook even further. Since the end of May, analysts have slashed their earnings forecast by 13%, and now see profits falling by more than 24% in 2018 to $1.35 per share. Meanwhile, estimates for 2019 also dropped by almost 10% and are forecast to rise 3% next year to $1.39.

Price Targets Too High

F Chart

F data by YCharts

Despite the declining stock price and estimate reduction, analysts are looking for the stock price to rise by almost 20% to $11.33 based on the average price targets. But that price target is down by almost 9% since the end of May when it was $12.41. Even the reduced-price target is likely too high, with the stock trading seven times 2018 earnings estimates, given the steep earnings decline, which has been trending lower. (For more, see also: How Ford Makes Money.)

Things may be about to get a whole lot worse for the stock before they get better, especially if the stock falls below its downtrend support. That means the average analyst's price target will drop even more, and that will not be a positive for the stock either.

Michael Kramer is the Founder of Mott Capital Management LLC, a registered investment adviser, and the manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of three to five years. Click here for Kramer's bio and his portfolio's holdings. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future performance.