It was bad enough just a couple days ago when we first heard about legacy automaker Ford (F) and a slate of multiple product recalls coming up. But a mixed bag of news emerged for Ford, as yet another product recall emerged, and a much more pleasant development hit as well in terms of Ford bonds. Ford stocks, however, did not take the news near so well, and shares fell over 2% in Thursday afternoon’s trading.
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A report from Bloomberg said that January is likely to be”one of the busiest Januaries for bond sales” ever seen, and underwriters are already getting ready. Ford is looking to borrow some money, as is its biggest competitor, General Motors (GM). Ford is out to offer up a two-part deal for “general corporate use,” noted the report, while General Motors will roll out its bond hunt in three parts.
In fact, noted the report, total bond issuance this month could hit $175 billion, among all the various companies—besides Ford and General Motors—looking to borrow some cash. Given that the decade average is currently around $145 billion for January, that would be a pretty significant beat. And while “strength in the banking sector” and “maturities of $100 billion” could be particularly helpful, others are concerned about potential “debt-ceiling disagreements” acting as a drag in months to come.
Yes, We Have More Recalls
Well, one more recall, anyway. But given the multiple product recalls that Ford has seen recently, one more is probably one more too many for anyone’s liking. This time, according to CBS News, 295,449 diesel models across several pickup lines ranging from the Ford Super Duty F-250 to the Ford F-750 were recalled over a matter of a defective fuel pump.
The pump in question may allow “biodiesel deposits” to form on drivetrain roller components, the report noted, and could ultimately take the high-pressure fuel pump with it. Notice about impacted vehicles should be mailed out January 13, and a software update for the powertrain control module is expected to fix things.
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 11.56% loss in its share price over the past year, the average F price target of $10.73 per share implies 10.79% upside potential.
