Ford Motor Company is recalling 90,736 automobiles due to engine intake valve issues that pose potential safety hazards. The National Highway Traffic Safety Administration (NHTSA) reported that the faulty valves could break while driving, creating a risk of accidents. The recall was initiated following an investigation in January 2022, which identified 22 incidents where engine intake valves fractured and dropped into the combustion chamber, causing significant engine damage.
The affected vehicles, manufactured between 2021-2022 under the Bronco, F-150, Edge, Explorer, Lincoln Nautilus, and Lincoln Aviator brands, are equipped with either a 2.7-liter or 3.0-liter Nano EcoBoost engine. Ford dealers will conduct tests on each vehicle and replace engines found to have faulty intake valves.
Regulatory Concerns Arise Over Ford’s Engine Valve Problems
The NHTSA, the auto safety regulator in the United States, highlighted the risk of engine intake valves breaking during operation, leading to “engine failure and a loss of drive power.” Ford’s analysis indicated that some intake valves did not meet the required hardness specifications, making them brittle and prone to fracturing under pressure.
Ford determined that the intake valve materials were impacted by the grinding processes of the supplier, resulting in deviations from the control specifications. Consequently, Ford revised the intake valve material for vehicles manufactured after October 31, 2021.
Assessing Ford’s Performance Amidst Challenges
In a climate of macro pressures and recall incidents, analysts have varying perspectives on Ford. According to rhetoric from TipRanks’ Bulls Say, Bears Say tool, some analysts show optimism towards Ford’s electric vehicle (EV) endeavors. Bulls are encouraged by Ford’s investments in streamlining the costs of its EV platforms and the potential of the Ford Pro unit, encompassing commercial vehicles.
On the contrary, Bears express apprehensions about persistent challenges, including EV pricing pressures and ongoing warranty issues plaguing the company’s operations.
Key Financial Indicators and Analyst Insights
Market sentiments on Ford’s stock trajectory remain divided. TipRanks reveals that Ford’s stock (F) holds a Moderate Buy consensus based on five Buy ratings, seven Hold ratings, and one Sell rating. The average price target for Ford Motor stock stands at $14, suggesting a potential upside of 25.1% from the current levels. However, F shares have experienced a 3.1% decline year-to-date.