Investors could see a 40 percent return on Ford stock as the automaker restructures its business and boosts its bottom line, according to Goldman Sachs analysts.
Goldman upgraded the company to buy from neutral and raised its 12-month price target to $12 from $9, sending shares up 3.3 percent in premarket trading Monday. The move implies a 33.6 percent upgrade from Friday's close. Combined with a 6.7 percent dividend yield, which Goldman called "sustainable," that puts the expected gain just over 40 percent.
"While we still expect a downward earnings trajectory into 2019 (North America profit under-pressure), we believe next year will represent trough earnings and the combination of a refreshed product cadence globally as well as cost improvements from strategic initiatives will begin to take hold," analyst David Tamberrino said in a note.
Cadence refers to the pace at which a company releases product, which Tamberrino said has lagged to six years in North America and China. The company is expected to up the pace starting in 2019.
Ford's announcement of $7 billion in restructuring of its cash spending over the next five years will help "improve its plant footprint and cost structure," Tamberrino added.
Ford shares are off 28 percent year to date. The company reported a $991 million profit for the most recent reporting period.
—CNBC's Michael Bloom contributed to this report.