Ford (F) Issues Another Recall for Trucks in North America

Ford Motor CompanyF is recalling 874,000 F-Series trucks due to fire risks in engine block heaters, per Reuters. The recall in North America consists of 410,000 pickup trucks from the United States and 464,000 from Canada.

The splice connector of the heater cable may get blocked due to water and contaminants, which can corrode or damage the cable. The heater cable is used to warm up the vehicle engine during cold weather. That cable might catch fire due to damaged cable splice connector. Three fire reports have been witnessed in Canada due to this issue. However, no incident of accident or injury has been reported.

Starting from January, the company's dealers will inspect the heater cable of recalled vehicles. Ford will replace faulty parts if required. The recall covers 2015-2019 Ford F-150 trucks, 2017-2019 Ford F-250 Super Duty, F-350 Super Duty, F-450 Super Duty, and F-550 Super Duty pickup trucks.

Ford Motor Company Price and Consensus

Ford Motor Company Price and Consensus | Ford Motor Company Quote

The F-Series lineup occupies one of the top spots among best-selling pickup trucks in America. Strong demand for high-end trucks compelled Ford to set a target of selling 1 million F-Series pickups by the end of 2018.

However, regular recalls hamper consumers' confidence in the brand beside adding to the company's expenses for repairing the faults. Similar to this, in September 2018, Ford recalled roughly 2 million F-150 pickup trucks due to faulty seat belts that could cause fire in vehicles.

Apart from frequent vehicle recalls, the company's quarterly results have been strained by market challenges in China and high commodity costs. In third-quarter 2018, Ford's adjusted earnings of 29 cents were in line with the Zacks Consensus Estimate while automotive revenues surpassed the same.

In 2018, Ford anticipates adjusted EPS of $1.30-$1.50. However, cash flow figure is expected to be lower than the 2017 level. Additionally, higher costs, along with worsening Europe and China business, will impede Ford's target to achieve EBIT margin of 8% by 2020.

Over the past three months, Ford's stock has lost 16.1%, underperforming 7.7% decline recorded by the industry it belongs to.

Zacks Rank & Stocks to Consider

Ford currently has a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation FOXF , Tesla, Inc. TSLA , and CarGurus, Inc. CARG . Fox Factory and Tesla currently sport a Zacks Rank #1 (Strong Buy) while CarGurus carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Fox Factory has expected long-term growth rate of 5%. Shares of the company have increased 39% year to date.

Tesla has an expected long-term growth rate of 35%. Shares of the company have rallied 2.7% year to date.

CarGurus has expected long-term growth rate of 5%. Year to date, shares of the company have gained 2.8%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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