For Immediate Release
Chicago, IL – July 30, 2026 – Today, Zacks Investment Ideas feature highlights General Motors (GM) and Ford Motor Company (F).
GM vs. Ford: Which Auto Giant Is the Better Buy After Q2 Earnings?
General Motors and Ford Motor have both delivered better-than-expected second-quarter results, demonstrating the resilience of Detroit’s legacy automakers despite challenges like tariffs, slowing EV demand, and elevated interest rates. Improved pricing, disciplined cost controls, and strong sales in trucks and SUVs allowed both companies to exceed Wall Street expectations while raising their full-year outlooks.
Following their upbeat Q2 reports, investors may wonder if there’s more upside left, with GM rising 18% this month and Ford increasing 11%.
GM Continues to Execute at a High Level
Reporting Q2 results last week, General Motors showcased its consistent earnings performance, with Q2 revenue reaching $48.02 billion—up nearly 2% year-over-year and surpassing estimates of $46.55 billion by 3%. The company’s adjusted EPS of $3.57 soared 41% from the previous year, exceeding expectations of $3.13.
GM has raised its full-year guidance for the second time, increasing its adjusted EBIT outlook to a range of $14 billion to $16 billion and raising adjusted EPS guidance to $12 to $14.
Operationally, North America remains the primary profit driver, with GM achieving an impressive 8.6% adjusted EBIT margin. This success is attributed to strong demand for full-size pickup trucks and SUVs, disciplined pricing, lower warranty costs, and improving EV profitability.
These results indicate that GM’s strategy of balancing traditional vehicles with a measured EV transition is effective. The company’s trailing 12-month EBIT margin stands at 5.78%, substantially higher than Ford’s 2.81%.
Ford Delivers an Encouraging Quarter
Ford also impressed investors with earnings, reporting adjusted EPS of $0.42, an increase from $0.37 a year ago, surpassing expectations by 27%. Adjusted EBIT climbed 17% year-over-year to $2.5 billion, benefiting from stronger pricing and improved cost discipline, despite a Q2 revenue dip to $44.89 billion.
Ford raised its full-year adjusted EBIT forecast to $10 billion-$11 billion, up from $8.5 billion-$10.5 billion, citing factors like improved vehicle pricing and expected tariff refunds.
GM & Ford Valuation Comparison
Both stocks remain attractively valued compared to the broader market. GM trades at a forward earnings ratio of 6X, while Ford is at 9X. GM’s improving earnings outlook and strong free cash flow generation suggest its discount to the S&P 500 may not be justifiable if performance continues.
Ford’s dividend currently stands at 4.01%, making it appealing for income-oriented investors, although GM’s aggressive share repurchases have generated significant shareholder value recently.
Conclusion & Final Thoughts
GM and Ford demonstrated that legacy automakers can achieve impressive earnings growth despite uncertainty surrounding various economic factors. For investors seeking better earnings momentum and an attractive valuation, GM appears favorable following its strong Q2 and guidance increase.
However, Ford’s outlook and shareholder-friendly strategy keep it an appealing long-term investment. Currently, GM holds a Zacks Rank #2 (Buy), while Ford secures a Zacks Rank #3 (Hold).
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Disclaimer: Past performance is no guarantee of future results. This material is for informational purposes only and does not constitute investment advice.
