Don’t Rush to Buy the Dip in Ford Stock Just Yet

Core Viewpoint - The broader market selloff, exacerbated by escalating tensions in the Middle East, has created buying opportunities, but Ford does not appear to be a compelling buy despite a 15% decline from recent highs [1] Group 1: Company-Specific Issues - Ford's stock decline is attributed to both market weakness and company-specific factors, including a recall of 4.3 million vehicles over software issues and a subsequent recall of 4.13 million vehicles due to rear suspension issues [2] - The National Highway Traffic Safety Administration (NHTSA) has announced an additional recall of over 600,000 vehicles for windshield wiper motor issues, contributing to Ford's unusually high frequency of recalls [2] - In 2022, Ford had 153 recalls, the highest for any automaker in modern history, totaling 12.9 million vehicles recalled, with expectations of another challenging year for recalls in 2026 [3] Group 2: Sales Performance - February sales data revealed a 5.5% decline in Ford's U.S. sales compared to the same month last year, with a 0.1% drop in internal combustion engine (ICE) car sales, a 71% fall in electric vehicle (EV) sales, and a 21.8% decline in hybrid sales [4] Group 3: Industry Challenges - Legacy automakers, including Ford, are struggling with their EV businesses, leading to significant losses on multi-billion-dollar investments, with Ford announcing a $19.5 billion write-down, including $5.5 billion in cash [5] - Competitors General Motors (GM) and Stellantis (STLA) have also reported substantial charges from their EV divisions amid stalled sales following the withdrawal of the EV tax credit [5]