NEW YORK, Sept 20 (Reuters) - Merrill Lynch said it was slashing its price target for Ford Motor Co. to $13.50 from $24 but maintaining its "buy" rating on shares of the world's second-largest automaker.
In a research note, Merrill Lynch said its decision to cut the target reflected "capital markets turbulence" and "intensified price cutting" by General Motors Corp. , Ford's leading rival.
"Expectations have simply fallen too low on a near-term basis as reflected by valuation, which is now at the very bottom of its 1990-2002 full-cycle range," Merrill said.
Ford, whose shares closed at about a 10-year low of $9.87 in trading on Thursday on the New York Stock Exchange, is struggling to implement a multiyear turnaround plan after losing $5.45 billion last year.
"We are not changing our buy opinion, because as disappointing as the last four months have been, it's water under the bridge," Merrill said in Friday's report. It cited "signs of modest fundamental improvement" at Ford for its decision to keep a buy rating on the company's shares.