Jefferies Upgrades Ford and GM on Improved Outlooks and Stronger Cash Flow
Jefferies upgraded both Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) to 'Buy,' citing stronger earnings prospects, improved free cash flow generation, and progress in addressing operational challenges. For Ford, the firm raised its price target to $17.50 from current levels around $14, with expectations for adjusted EBIT of $10.3 billion in 2026 and a narrowing valuation gap compared to GM. For General Motors, Jefferies increased its price target to $99 from the current level near $86, projecting over $10 billion in annual real free cash flow starting in 2027. The analysts highlighted new vehicle launches like Silverado and Sierra trucks, efficiency gains, and digital services as key drivers for GM's earnings improvement. Both automakers are expected to benefit from improved pricing power, reduced warranty costs, and better capital allocation strategies. Jefferies noted that Ford is trading at about 6.6 times estimated 2027 earnings while GM trades at around five times the same metric.
Topics: Automotive Earnings Outlook Free Cash Flow