Buy GM Stock, Says Analyst. Tariff Bark Worse Than Its Bite.

Coming into Friday trading, GM stock was up about 20% over the past three months as investors have started to worry less about Trump’s tariffs. (Scott Olson/Getty Images)

Key Points

About This Summary

• Barclays upgrades General Motors and Aptiv, citing a more neutral view of the U.S. auto industry.
• Tariffs weren’t as severe as feared, and the industry offset tariff costs, keeping car sales strong.
• Aptiv is splitting into two companies, with the software business expected to trade at a higher valuation.

Things are looking better for the U.S. car industry lately, leading one analyst to upgrade two stocks.

Barclays analyst Dan Levy on Friday upgraded shares of General Motors and parts supplier Aptiv to Buy from Hold, while taking his view of the industry to “Neutral” from “Negative.”

His GM price target was raised to $73 from $55 a share. His Aptiv price target went to $105 from $85.

It wasn’t hard to understand why Levy had a negative outlook on the sector. Import tariffs on cars and car parts threatened to wipe out billions in operating profits. Tariffs turned out not to be as severe as feared, with the Trump administration providing tariff relief on parts from Canada and Mexico. Countries have also been able to negotiate trade deals with reduced tariff rates.

“When tariffs emerged in the auto industry earlier this year, concerns emerged that the industry would be entering a period of clear uncertainty, facing the threat of higher costs, pressure to consumer health, and potential industry disruption,” wrote Levy in a report Friday. “Yet six months into the onset of tariffs, we’ve been positively surprised by the extent to which the industry has held in better than anticipated.”

GM was up 0.9% at $59.25, while the S&P 500 gained 0.1% and the Dow Jones Industrial Average was off 0.1%. Aptiv stock was down 0.6%.

Overall, 57% of analysts covering GM stock rate shares Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analyst target price for GM shares is about $58.

For Aptiv, 68% of analysts covering the stock rate shares Buy. The average analyst price target is about $88.

Aptiv is also breaking into two companies: One will supply electrical components, the other will sell safety and software solutions. Investors are hopeful that the safety and software business will trade at a higher valuation multiple as it diversifies its business away from primarily cars.

Car companies and parts suppliers don’t trade at big valuation multiples. GM stock trades for about six times estimated 2026 earnings. Aptiv stock trades for 10 times. The S&P 500 trades for closer to 21 times.

Coming into Friday trading, GM stock has risen about 10% this year. Aptiv shares have gained 38%.

Write to Al Root at allen.root@dowjones.com