Anyone who has followed legacy automaker Ford (F) for any length of time lately knows things have not always gone well for it. In fact, some are starting to reconsider their holdings thanks to a declining share price, a dividend that looks increasingly untenable, and more. The doubt seems to be catching on, and investors pulled back, sending Ford shares down over 2.5% in Tuesday afternoon’s trading.
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Ford has offered a dividend for a long time now, and a fairly decent one as stocks go. Usually the dividend is around $0.15 per quarter, though some quarters have seen $0.30 or so, with one quarter in the last three years coming up around $0.80. But with tariff pressures hitting hard on both supplies coming in and finished goods sales going out, there are clear concerns among investors that Ford may not have the cash flow to keep that dividend going much longer.
Ford’s plans to focus on a few select areas—the commercial market, the electric vehicle market, and the conventional gas vehicle market—have helped, but wholesale sales have been declining. There are some signs sales are doing well, especially in recent month-over-month comparisons, but there are also concerns, like the electric vehicle market slumping.
Recalls No Help
And of course, there is the matter of Ford’s seemingly endless slate of recalls. There is a value to these, of course; it demonstrates that Ford takes safety seriously and is proactive about it. However, the fact that there are so many recalls to begin with suggests that Ford has a serious problem with quality. Ford’s reputation for reliability and its trust among consumers is very much at risk.
Then there are the costs involved; recalls do not just take time, they take money. All these dealerships who need to replace parts or check if a part even needs replaced to begin with are charging their time back to Ford. All these replacement parts are not free, either. Warranty costs cleared $6 billion in 2024, reports noted, and they are on track to be higher in 2025.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on two Buys, 12 Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 17.44% loss in its share price over the past year, the average F price target of $9.82 per share implies 13.73% downside risk.
