© Reuters. Ford (F) underweight at Wells Fargo following lightning production halt
By Michael Elkins
Wells Fargo reiterated an Underweight rating and $10.00 price target on Ford (NYSE:) 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. Analysts 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.
Analysts 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.
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