Ford (F) Stock Declining Today as it Expands Air Bag Recall

NEW YORK (TheStreet) -- Shares of Ford Motor Co (F) are down 0.56% to $15.92 in early market trading Thursday, as the car maker expanded a recall of about 38,500 vehicles due to its air bag inflators made by Takata Corp. (TKTDY) , Reuters reports.

The move brings the total to 98,000 Ford vehicles being recalled for issues related to Takata air bags.

Ford will recall certain 2004 to 2005 Ford Ranger models and 2005 to 2006 Ford GTs, mostly in certain areas of the country with high humidity, Reuters added.

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According to the National Highway Traffic Safety Administration, the defective Takata air bag inflators in certain vehicles can rupture and spray metal shards.

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 multiple strengths, 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 good cash flow from operations 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:

  • Net operating cash flow has increased to $5,369.00 million or 39.81% 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 -37.61%.
  • Despite the weak revenue results, F has outperformed against the industry average of 18.0%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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 32.3% 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 36.0% in earnings ($1.12 versus $1.75).
  • The share price of FORD MOTOR CO has not done very well: it is down 7.47% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
  • You can view the full analysis from the report here: F Ratings Report

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