It was good news for legacy automaker Ford (F) today as it staged a rally from its losses of yesterday. But this good news was built on an uncertain foundation, at least as far as Ford Kuga hybrid drivers were concerned. Despite some serious issues with the Kuga, Ford shares still managed to recover most of their losses from yesterday, up nearly 2% in Wednesday afternoon’s trading.
Just weeks ago, Ford launched a recall, which is not all that surprising given how many such recalls it has already staged so far this year. This recall focused on the Ford Kuga, a plug-in hybrid that is basically the equivalent of the Ford Escape in several other countries, including the United States. The Kuga hybrids got a particularly urgent recall, and a strict admonition to not plug in their cars. Apparently, there was a battery defect in the cars that could have had the car catch fire.
However, the problem here is that, around four weeks later, Ford has issued no plan for repairs. Worse, Kuga drivers are noting that Ford is not responding to their calls for any kind of update. Some reports suggest that there will be a remedy available for the defect “by July,” which represents another potential three months of wait. Worse, this is the second time the Kuga has faced recall, with another fire hazard issue cropping up back in 2020.
Shuttering Louisville
Meanwhile, Ford is planning a large-scale remodeling project at a time when it probably should have all its factories on American soil ready to go. Ford is shutting down its Louisville assembly plant for a full 10 months to stage the project in question. United Auto Workers representatives noted that the plant would close in December, or maybe a bit sooner, to kick off the project.
This comes not long after Ford committed to building an “all new” electric vehicle at the Louisville plant back in 2023. That actually suggests that may be what the remodeling may be about, as Ford was building the Escape there, a car which will no longer be built after this year, reports note. The good news for Ford workers is that they will get unemployment pay until it runs out, and then, they will get “sub pay,” which is about 70% of their normal wages for the entirety of the shutdown.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on four Buys, 10 Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 20.09% loss in its share price over the past year, the average F price target of $10.46 per share implies 3.46% upside potential.
