Ford (F) underweight at Wells Fargo following lightning production halt
Wells Fargo reiterated an Underweight rating and $10.00 price target on Ford (F) after the American automaker announced that the company will halt production and shipments of their F-150 Lightning model trucks due to a battery issue. Analyst, Colin Langan noted that, while no stop-sale has been issued yet, if the 18k units sold so far are recalled, Wells Fargo estimates the cost could be >$235M for Ford and SK Innovation.
Langan wrote in a note, “Production was halted last week & Ford will not resume until the root cause is identified. It seems as if the issue was caught before defective units were shipped as no stop-sale was issued for units at dealers and there was no recall on the ~18K Lightnings sold so far. That said, historically these issues can spread, so a recall is still possible. Recall cost would likely be manageable at >$235M, shared with SK. Therefore, we see more reputational, rather than financial risk.”
Shares of F are down 0.23% in pre-market trading on Wednesday.
By Michael Elkins | [email protected]