MW GM's stock gets an almost 'silly' upgrade. Why this analyst is now bullish on its prospects.
By William Gavin
Shares of Ford and GM have logged nice gains in the past year, and Piper Sandler says capitulations on EVs bode well for their performance going forward
General Motors in October said it would take a $1.6 billion charge as it reassessed its plans for electric vehicles.
By pulling back on electric vehicles, General Motors and Ford have improved the outlook for their stocks, according to a Piper Sandler analyst.
General Motors $(GM)$ has already taken a $1.6 billion charge related to a reassessment of its EV plans, and Ford $(F)$ expects to record an $8.5 billion charge related to canceled plans for all-electric models. The short-term pain could give way to a healthier earnings picture down the road, Piper Sandler's Alexander Potter said, while turning bullish on both of the traditional carmarkers' stocks.
See more: Ford axed major EV plans, and these latest numbers show why
"Positive earnings revisions seem likely for U.S. [manufacturers], thanks to limited China competition and a less combative [ U.S. Environmental Protection Agency]," Potter wrote, calling out a "particularly compelling" setup for GM and Ford. Both plan to put a greater emphasis on hybrids and gas-powered vehicles, which the companies think will help balance their lineup.
While they are similar companies, Ford and GM are viewed very differently by analysts. More than 60% of sell-side analysts covering GM have buy ratings on the stock, compared with 17% of analysts covering Ford, according to FactSet.
Ford's earnings before interest and taxes could grow by about $1.5 billion in 2026 compared with a year earlier, Potter said. However, he added that Ford could outperform that projection if its EV losses narrow sooner than expected. Ford is expected to take a $4.89 billion hit on its EV unit for 2025, similar to what it recorded in 2024.
Potter raised his price target on Ford's stock to $16 per share from $11. Shares are up almost 5% in afternoon action on Thursday as investors cheer the company's plans to introduce eyes-off driving capabilities to vehicles in 2028. The stock has gone up 47% over the last 12 months.
"Autonomy shouldn't be a premium feature," Doug Field, Ford's head of EV, digital and design, said in a statement. "By designing our own software and hardware in-house, we've found a way to make this technology more affordable."
Potter also raised his price target on GM's stock, to $98 from $66. The stock has jumped 64% over the last 12 months and was ahead almost 3%, at $84, in midday trading Thursday.
"We must admit, upgrading GM now makes us feel a bit silly," Potter said, adding that the Wall Street consensus looks "beatable." He expects flattish revenue in 2026 but thinks adjusted EBIT could grow by $800 million thanks to the company's "mix-shift away from EVs."
GM sold 48% more EVs in 2025 than it did in 2024, despite a 43% year-over-year decline in the fourth quarter. Ford sold 14% fewer all-electric vehicles in 2025 compared with a year earlier, while hybrid and gas-powered car sales increased, giving the company its best sales year since 2019.
The December period was the first since the U.S. ended tax credits that encouraged EV sales. The federal government last year also rolled back fuel-economy standards and began working to roll back tailpipe-emission standards that pushed automakers to make cleaner cars. Experts expect EV sales to slow over the next few quarters, although it's unclear how big any decline might be.
See more: Ford axed major EV plans, and these latest numbers show why
Potter also upgraded shares of Jeep maker Stellantis $(STLA)$ to overweight from neutral while lifting his price target to $15 from $9. That's largely because the struggling automaker could turn things around in the U.S. with new vehicle launches timed for 2026, Potter said.
As for Tesla $(TSLA)$, Potter thinks the stock is still a "must own" thanks to the company's energy business and artificial-intelligence plans. However, he noted that traditional metrics like deliveries and automotive gross margin are "deteriorating."
Absent "quantifiable financial evidence related to [Full Self-Driving] or robotaxis, investors may focus on otherwise weakening company-wide metrics," he said.
-William Gavin
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(END) Dow Jones Newswires
January 08, 2026 13:30 ET (18:30 GMT)
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