Ford Motor Co. got a welcome rating upgrade to neutral from Credit Suisse, as the automaker works to regain the investment grade status it last held in 2005.

The rating agency had Ford at underperform but upgraded the automaker for being a stronger company than it was a year ago, despite fourth-quarter earnings that did not meet analysts' expectations, reported The Detroit News.

"Since late April 2010, a number of things have changed," Credit Suisse analyst Christopher Ceraso write in a report released today.

"Ford has demonstrated earnings power that is substantially greater than was anticipated at the time," Ceraso said in raising the 12-month price target for the stock to $18 from $17.

Ceraso said Ford's balance sheet is much stronger than it was a year ago with net debt of about $2 billion, down substantially from $15 billion last April.

Debt reduction is crucial for the company that avoided following General Motors Co. and Chrysler Group LLC into bankruptcy, where those carmakers shed most of their debt. Ford mortgaged everything the company had, including its Blue Oval trademark, to restructure itself and has made cleaning up its balance sheet a priority.

The automaker seeks to get its debt back to investment grade status and start paying dividends again.

Credit Suisse noted that Ford shares had a strong run from July 2010 to January 2011 but then saw some falloff so that the stock has only increased about 11 percent from a year ago. But Ceraso sees that as providing a more reasonable valuation of the company than a year ago.

Disappointing fourth-quarter earnings of $190 million or $0.30 per share injected a healthy dose of skepticism into the stock, Credit Suisse said.

Ford recorded a $6.6 billion profit in 2010.

"However, beneath that caution, we believe investors are ready and willing to re-embrace Ford," Ceraso said.

A strong first-quarter profit — he estimates $0.55 per share which is above the 48-cent consensus — "could be the catalyst the market is waiting for."