Normally, when a major company issues a recall, it’s with an eye toward fixing a problem. While no one wants to discover that something they own has been basically botched at the assembly level, if it’s done correctly, a recall can actually improve a company’s image. That was not, however, what happened to Ford (NYSE:F), as the legacy automaker saw shares drop 4% on news of a recall that wasn’t actually going to fix the problems involved.
The recall in question will cover several breeds of SUVs that have 1.5-liter engines. This includes the 2022 Escape, along with Bronco Sport models from 2022 and 2023. The 43,000 vehicles connected with these recalls have the potential to leak gasoline from the fuel injectors, which could, in turn, reach hot engine surfaces.
Despite this clearly massive risk, the planned remedy won’t actually fix the leaks at all. Instead, there will be a tube installed that will reroute the leaked gasoline to drop onto the ground. Since this only happens in about 1% of vehicles, apparently, this will do for a solution.
Dialing Back on EV Production
This development might have been bad enough by itself in the E part of ESG operations—their fix for leaky fuel injectors is to reroute the gasoline to hit the ground—but it comes at a time when Ford also announced it was dialing back its plans for electric vehicle production.
A planned new electric pickup won’t arrive until 2026, and a new three-row electric SUV got pushed back further still to 2027. A new joint venture battery plant also got delayed, and production for the currently available F-150 Lightning pickup just lost an entire shift.
What Is the Target Price for Ford Stock?
Turning to Wall Street, analysts have a Hold consensus rating on Ford stock based on five Buys, six Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 7.75% rally in its share price over the past year, the average Ford price target of $13.63 per share implies 5.17% upside potential.
