Ford Motor Company (NYSE:F) and General Motors Company (NYSE:GM) have both been upgraded to ‘Buy’ by Jefferies analysts, who pointed to improving earnings prospects, stronger free cash flow generation and progress on several operational challenges.
For Ford, Jefferies upgraded the stock ahead of second-quarter earnings, calling the period a potential margin trough as production normalizes following disruptions and the company benefits from improved capital allocation.
The analysts raised their price target to $17.50, noting that Ford’s valuation gap with GM has narrowed. Shares are currently trading at about $14, up 10% so far this year.
Jefferies expects Ford’s adjusted EBIT to reach $10.3 billion in 2026, near the upper end of the company’s guided range of $8.5 billion to $10.5 billion. The analysts also raised their adjusted free cash flow estimate to about $4 billion, supported by earnings improvements, working capital benefits and lower supplier EV compensation costs.
The analysts highlighted progress across several areas, including Ford’s universal EV platform strategy, battery energy storage system investment, warranty improvements and efforts to reduce its European asset footprint. Jefferies expects Ford’s Blue business to improve in 2027, helping earnings recover after a challenging period.
The firm expects Ford’s second-quarter results to reflect continued volume pressure but noted that lower production could allow the company to focus on vehicle mix and avoid higher-cost aluminum sourcing. Jefferies estimates second-quarter group adjusted EBIT of $2.5 billion and expects EV losses to moderate.
For General Motors, Jefferies also raised its rating to 'Buy,' citing confidence that the automaker can continue strengthening its position in the US market and generate more than $10 billion in annual real free cash flow from 2027 onward.
The firm raised its 2026-2028 estimates by about 6% and increased its price target to $99, above current levels of about $86.
Jefferies expects GM’s earnings improvement to be supported by new vehicle launches, efficiency gains and greater diversification. The analysts highlighted upcoming Silverado and Sierra truck launches, improved vehicle content, including Super Cruise technology, and potential growth from digital services.
The firm raised its 2026 adjusted EBIT estimate for GM to $15.8 billion, at the upper end of company guidance, and projected 2027 adjusted EBIT of $17.4 billion. Jefferies expects North American operations to remain the key earnings driver, supported by stable market share, improved pricing and continued progress on warranty costs.
The analysts noted that GM has made progress reducing warranty expenses, with $500 million of improvement recorded in the first half of the year, while additional cost opportunities remain. They also highlighted that much of the company’s EV-related cash costs have already been incurred, reducing future pressure.
Jefferies wrote that both companies are positioned for improved earnings visibility, with Ford trading at about 6.6 times estimated 2027 earnings and GM at about five times estimated 2027 earnings.
The firm noted that a valuation re-rating could provide additional upside, although it is not required to support its price targets.