Sometimes the smartest business move is knowing when to quit. That's essentially the message from Piper Sandler analyst Alexander Potter, who just upgraded Ford Motor Co. (F) and raised his price target to $16 from $11, citing the automaker's strategic pivot away from electric vehicles as "a welcome development."

Here's the thing about Ford's EV adventure: it wasn't going well. Potter didn't mince words in his upgrade note, describing Ford's first-generation electric vehicles as "highly unprofitable (and not especially compelling)." Even though the company was developing a next-generation EV platform using the same philosophy as Tesla Inc. (TSLA) and Chinese automakers, Ford was burning cash on products that weren't winning customers.

So Ford made a pragmatic call. The company decided to partner with Renault (RNLSY) and took a massive $19.5 billion write-down on EV assets. It's the kind of decision that takes guts, admitting that billions in investments aren't panning out as planned.

But Potter sees the silver lining. By pulling back from EVs and scaling down European operations, Ford is doubling down on what it does best—the lucrative segments where it actually makes money. The analyst believes Ford is positioned for significant margin expansion through 2027, fueled by reduced warranty spending and a better product mix.

Potter is projecting earnings of $1.95 per share for Ford, notably above the consensus estimate of $1.77. That's a meaningful gap, suggesting the market might be underestimating how much this strategic refocus could benefit the bottom line.

Price Action: Ford shares traded down 0.94% to $14.26 on Friday.