Ford Recalls More Than 600,000 Vehicles Over Hydraulic Defect

Ford Motor Company (NYSE:F) recently recalled more than 600,000 vehicles, which includes certain versions of the 2006-10 Ford Fusion, Mercury Milan and Lincoln MKZ, over a hydraulic defect that might result in crashes. The vehicles, which were made between Feb 22, 2006-July 15, 2009, total 600,166 in the United States and its territories.

Per Ford, a normally-closed valve inside the hydraulic control unit of some vehicles might stick open, leading to extended brake pedal travel, in turn, escalating risk of a crash. The defect is anticipated to be the root cause behind 15 accidents and two injuries at least.

Dealers may check for signs of stuck or slow-responding valves in the hydraulic control unit of the affected vehicles and replace the same, if required. The DOT 3 reservoir cap is likely to be replaced with a new DOT 4 cap, while the system will be pressure-flushed with DOT 4 brake fluid.

Lately, the company has also recalled more than 500,000 Ford Super Duty SuperCrew vehicles, developed between 2017 and 2019, over post-crash interior fire risk. This will likely affect 490,574 vehicles in the United States and federal territories, 56,112 in Canada, and 852 in Mexico.

Year to date, shares of Ford have outperformed the industry it belongs to. Its shares have appreciated 32.2% compared with the industry’s rise of 26.9%.

For full-year 2019, Ford expects adjusted EBIT of $7-$7.5 billion compared with the prior year’s $7 billion. Adjusted EPS is anticipated in the $1.20-$1.35 band compared with the $1.30 recorded in 2018. The range assumes a full-year adjusted effective tax rate in the band of 18-20%, which indicates a rise of 10% from the year-ago levels. This is likely to create a headwind of 12-16 cents per share for this year.

Zacks Rank & Stocks to Consider

Ford currently carries Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector include Weichai Power Co. (OTC:WEICY) , Spartan Motors, Inc. (NASDAQ:SPAR) and SPX Corporation (NYSE:SPXC) . While Weichai Power flaunts a Zacks Rank #1 (Strong Buy), Spartan Motors and SPX carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Weichai Power has a projected earnings growth rate of 6.11% for the current year. Its shares have gained 83.8% over the past year.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 152.9% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The stock has soared 100.5% in the past year.

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