Citi Bank started Wednesday coverage on the Detroit automakers Ford and General Motors, with considerably higher upside potential for the Mary Barra-led automaker.
The New York-based firm set a price target of $62 on GM shares, with a Buy rating. Based on Tuesday’s closing price of $45.16, the target implies an upside potential of 37%.
Citi rated Ford‘s stock as Neutral while seting a price target of $10. The company previously closed at $9.65, resulting in a slight upside potential of below 4%.
GM
In a new research note published on Wednesday, Michael Ward said that “at the current rate, the new tariffs will likely have a negative impact on GM’s near-term performance.”
However, “there are levers the company can apply to mitigate the impact in the intermediate and long term”, such as “underutilized plants in Ft Wayne, IN and Spring Hill, TN that share platforms with vehicles assembled in Mexico for the U.S. market”, which could “help to limit some of the tariff impact from Mexico.”
Ward highlighted that the group “also relies on imports from China to supply the market in Mexico,” suggesting that “production of some of those vehicles can be moved into the Mexico plants.”
“Over the last three years, GM has generated $30 billion of surplus operating cash flow, returning two-thirds of it to shareholders,” the analyst noted, with Citi expecting “the elevated cash generation to continue in 2025-26 despite the near-term headwinds from the tariffs.”
On Tuesday, General Motors’ executive vice president of global manufacturing resigned, one year after joining the Detroit automaker. JP Clausen was leading the company’s manufacturing, labor relations organizations, sustainable workplaces and stated that the decision wasn’t made “lightly.”
Earlier this week, it was also revealed that the company is facing a lawsuit for allegedly violating customers’ privacy by collecting and selling their driving data without permission.
Ford
On the other hand, Ward appointed Ford‘s “uneven production relative to plan in North America, increases in warranty accruals, and heavy losses with battery electric vehicle production as “a few of the factors limiting the stock’s performance.”
The analyst asks for “more tariff-related clarity,” as first quarter earnings “will be adversely affected by a changeover at key production facilities and the current tariff outline,” which could “reduce performance by $2-3 billion.”
Citi’s analyst said that “Ford has struggled with key products,” mentioning “delayed launches, uneven schedules and quality […] problems over the last few years with key products in North America.”
However, he noted that the Detroit automaker’s “most profitable segment, Ford Pro, is the market leader in commercial trucks in North America.”
The company’s income from global auto operations “totaled $9.2 billion in 2024 down from $10.0 billion in 2023,” to which Ward added that Citi’s “forecast is for income of $5.7 billion in 2025.”
As “Ford’s automotive balance sheet ended 2024 with a net cash balance of $7.7 billion,” the firm expects the company to “generate surplus operating cash of $3.4 billion in 2025 and $4.9 billion in 2026.”
Last week, the Wall Street Journal reported that Ford suspended shipments of high-end vehicles from the U.S. to China, as a response to the global trade tensions between the two largest economies in the world.
