It is a bad day for legacy automaker Ford (F) when news of a recall hits. Given the state of Ford these days, though, it feels less like a bad day and more like Tuesday. But when you throw in a class-action lawsuit on top of things? Then a bad day takes on a whole new level. That is just what happened to Ford today, and shares were down over 1.5% in Tuesday afternoon’s trading.
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The class action lawsuit was recently filed in Michigan federal court, and brings together a group of F-150 owners who claim that F-150 trucks have the same defect: they burn oil. Some of them do, anyway, and Ford did not happen to tell anyone about the defect. This was what started up the lawsuit. The class action includes 12 plaintiffs in total, so far, who filed the complaint on August 28.
The lawsuit notes that a defect in Ford engines prevents them from maintaining correct oil levels. Thus, the drivers must maintain their own oil levels, constantly checking at a pace that even makes the owner’s manual suggestions look lazy by comparison. Ford received multiple complaints about the issue, reports note, but did not tell consumers or provide any kind of suitable repair or replacement, thus the suit began.
1.9 Million Vehicles Recalled
The lawsuit was bad enough, but then came yet another recall. And a very big recall at that; this was a recall that impacted around 1.9 million vehicles, all told. Models released between 2015 and 2019 were impacted, and include both the Lincoln MKC and Lincoln Navigator. Also on the list are the Ford Mustang, F-450, F-550, and two of Ford’s biggest models: the Edge and the Expedition.
The issue this time is rear-view cameras, which could display inverted or distorted images, or potentially none at all. While in this case, use of the rear-view mirror or looking over your shoulder could fix things, Ford is still on the hook. And, after landing a $165 million penalty over rear-view cameras back in November 2024, it was a safe bet that Ford would move to address this recall much more rapidly.
Is Ford Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on F stock based on three Buys, eight Holds and three Sells assigned in the past three months, as indicated by the graphic below. After a 13.28% rally in its share price over the past year, the average F price target of $10.77 per share implies 6.31% downside risk.
