Analysts at Morgan Stanley warn that Ford could see pressure on both production volumes and profit margins during 2026. The bank cites an ongoing global memory chip shortage that has forced Ford to cut planned output by as much as 10% in certain assembly plants, translating to roughly 50,000 fewer vehicles. At the same time, commodity headwinds—particularly steel and aluminum costs, which have risen by 12% and 18% year-over-year respectively—are eroding per-vehicle gross margins by an estimated $200 to $250. Should these trends persist into the second half of the year, Ford’s adjusted operating margin, which stood at 4.0% through the third quarter of 2025, could dip below 3.5%.

The National Highway Traffic Safety Administration has mandated a recall of 119,075 Ford vehicles in the U.S. due to an engine block heater that may crack, leak coolant and short-circuit, creating an under-hood fire risk. Affected models span multiple generations—including 2013-2018 Focus, 2013-2019 Escape, 2015-2016 Lincoln MKC, as well as 2019 and 2024 Explorer vehicles—and cover all units equipped with the heater option. Ford estimates that approximately 1,191 units have already developed the defect. Dealers will replace the block heater at no cost to owners; interim owner notification letters will go out by February 13, 2026, with final repair campaigns beginning in April 2026.

Ford’s decision in December to shift focus away from large-scale electric trucks toward hybrid and traditional combustion models has resonated positively with investors. The move will trigger a one-time, non-cash impairment charge of $19.5 billion tied to discontinued electric programs but is expected to restore profitability to its EV division over the medium term. Through the first three quarters of 2025, Ford reported revenue of $141.4 billion, up 3% year-over-year, though adjusted operating income declined from $8.1 billion to $5.7 billion largely due to a key supplier’s plant fire. Looking ahead, consensus forecasts call for adjusted earnings per share of $1.52 in 2026, versus $1.10 in 2025, implying a forward price-earnings multiple near nine times. Investors view this as a sign that Ford is well positioned for stronger profit growth, provided macro conditions remain stable.