Don't hold your breath, but if all the "ifs" fall into place, Ford Motor Co. shares on the New York Stock Exchange "easily" could skyrocket to $150 a share within a few years.

By contrast, Ford's share price peaked in May 1999 at $64 plus change, and its low over the last year was $40.69 in March. In mid-May it was trading in the $53 range.

The $150 scenario is painted by John Casesa, the Merrill Lynch automotive analyst, who says Ford first must solve its nagging overseas problems and then "prove" that it can weather the next down-cycle without slashing dividends or product programs.

Mr. Casesa is high on the No.2 automaker's prospects. His official position places Ford in the "neutral-buy" category, something akin to a wait-see recommendation as the company plows into problems abroad (see cover story p.34).

Nicholas Lobaccaro of Lehman Bros. Inc. has a "buy" position on Ford stock and clearly remains bullish about its future. He sees a $10 uptick short-term. "I think it's clearly an undervalued stock," he tells WAW. "Ford is mainly in the penalty box because the market isn't giving credit for its strength in North America." Rather, difficulties abroad overshadow what's happening at home, he suggests, even though Ford overall keeps beating Wall Street's earnings estimates.

Mr. Lobaccaro says Ford had out-performed the leading indices for more than a decade, and reminds that it has spurted since hovering in the $40 range during February and March this year. He blames the investor stampede away from "old economy" companies such as Ford into dot-com and technology stocks as partly to blame for its relatively staid performance on the NYSE.

President and CEO Jacques Nasser, underscoring that Ford's shares over the past several decades have beaten gains in the Dow Jones and Standard & Poor's 500 indexes, says one reason it hasn't capitalized as handsomely "is a swing from the industrial consumer companies to the high-tech companies; that's where the money (has been) going."

Ford also has been a victim of speculation that the automotive boom, now eight years and counting, finally is ending - continuing solid sales figures notwithstanding. "Most analysts and investors figured that the economic cycle had finished, and (that) we were going to go into a quiet downturn," says Mr. Nasser, "and that didn't happen." But now, he adds, "You are seeing a return to value and fundamentals."

Ford and other traditional manufacturers are handicapped by their relatively low price/earnings (PE) ratios long used by investors to gauge corporate strength and attractiveness as an investment.

PE ratios are calculated by dividing earnings per share into market price. For simplicity's sake, say the company earns $10 a share and sells for $100. Its PE ratio would be 10. That's not bad, but Ford's PE ratio is averaging around 8 compared to four times that level for other large companies such as General Electric.

Moreover, PEs of some of the fast-moving tech and dot-com outfits have soared out of sight as investors shift to join the gold rush. As more investors buy in, their stock prices go up still further, embellishing their PEs.

All of which is a complicated way of saying that old-line stocks such as Ford's continue to suffer despite some remarkable profits that dot-coms can visualize only in their dreams.

Ford is doing the right thing by tackling its malaise in Europe and Latin America, Mr. Casesa says. "For Ford to earn higher multiples (i.e., a higher PE) it has to keep doing things to transform the company, " he says. "That'll take time, but it's getting better every day. With continuing improvement, its multiple could go to 10, 12 or 15 during the next up-cycle."

That's how he gets that magic $150: At 15 times earnings of $10 a share Ford would command $150 on the Big Board.

So how can Ford position itself to capitalize on the next upturn? Its recent proposals to spin off its Visteon components group and return $10 billion to shareholders in stock or cash are steps in the right direction, analysts agree.

Visteon's departure removes heavy investments now underwritten by the parent company, and the stockholder payout underscores Ford's commitment to enhancing shareholder value.

The payout also helps the Ford family, which owns 40% control through their Class B stock. They stand to collect $1.4 billion without diluting their B shares, which should come in handy for paying cash dividends to family members or financing inheritance taxes.

"That $10 billion benefits everybody," says David E. Cole, director of the University of Michigan's Office for the Study of Automotive Transportation. "It gets rid of excess cash, and it broadens ownership. Wall Street runs in herds, and they've been running away from cyclical stocks."

Mr. Casesa says the payout "is terrific for stockholders, but it increases Ford's risk" when things turn south. Yet even with this stockholder largesse, Ford still has around $13 billion in its cash stash.

Mr. Casesa argues that Ford would be wise to keep up to $15 billion on hand for leaner days to assure that dividends and product programs remain intact.