Why Ford Motor (F) Stock Is Down Today

NEW YORK (TheStreet) -- Shares of Ford Motor Co. (F) are lower by -1.44% to $17.07 in mid-morning trading on Tuesday as the company is recalling almost 101,000 cars in order to repair safety issues, the Wall Street Journal reports.

Ford is recalling 92,000 sedans and sport-utility vehicles due to a safety issue that could result from a poorly installed right-hand half-shaft.

The half shaft might become dislodged causing the car to move unexpectedly.

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Cars included in the recall are the 2013-2014 Ford Taurus, Ford Flex, Lincoln MKS, and Lincoln MKT, and the 2012-2014 Ford Edge and the 2014 Lincoln MKX SUV, WSJ added. 

Ford is also recalling close to 2,100 2014 Ford Escape vehicles so it may fix an issue with the panoramic glass roof, and nearly 200 2014 Ford Fiesta compacts to repair a leak in the fuel tanks, WSJ said.

Separately, TheStreet Ratings team rates FORD MOTOR CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate FORD MOTOR CO (F) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • F's revenue growth trails the industry average of 21.8%. Since the same quarter one year prior, revenues slightly increased by 0.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 952.13% to $2,220.00 million when compared to the same quarter last year. In addition, FORD MOTOR CO has also vastly surpassed the industry average cash flow growth rate of 41.62%.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Automobiles industry and the overall market, FORD MOTOR CO's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • FORD MOTOR CO's earnings per share declined by 40.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, FORD MOTOR CO increased its bottom line by earning $1.75 versus $1.42 in the prior year. For the next year, the market is expecting a contraction of 24.0% in earnings ($1.33 versus $1.75).
  • You can view the full analysis from the report here: F Ratings Report
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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