GM and Ford: Bank of America Names 2 Top Auto Stocks to Buy for 2026
The changeover of Presidential Administrations always brings changes of policy priorities, and those can ripple outward. Sometimes, it’s impossible to know where the ripples will end, and sometimes, it’s easy. Last month, one of the easier ripples made itself felt.
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The second Trump Administration took office promising to roll back large parts of the Biden regulatory regime, including difficult findings on greenhouse gases and automobile fuel economy. The greenhouse gas standard, the GHG, is a rollback, meaning that the Feds have rescinded their designation of carbon dioxide as a ‘threat to public health and welfare.’ The fuel economy measure concerns CAFE, or corporate average fuel economy, which is used to set gas mileage and efficiency standards for cars on the road. Trump’s Administration has lowered the standard, making it easier for automakers to comply – the higher Biden standard was designed to promote construction of electric vehicles.
This new regulatory model will allow Detroit’s major automakers, Ford and GM, to lean harder into high-margin trucks and SUVs, their big money-makers, while dialing back orders for less popular electric vehicles.
Bank of America is following this conclusion to its logical end: that the Detroit legacy names are going to benefit from this chance to change course under a more favorable regulatory environment. The bank is naming General Motors (NYSE:GM) and Ford (NYSE:F) – two legendary names in the automotive industry – as top auto stocks for 2026. Let’s give them a closer look, and find out why these veterans of Detroit’s Big Three are getting Bank of America’s thumbs-up.
General Motors
We’ll start with General Motors, the owner of the Chevy, Buick, Cadillac, and GMC nameplates. These include some highly recognizable names, such as the Chevy Silverado pickup truck and the Cadillac Escalade SUV. GM has been selling industry-leading cars for over a century; the company was formed as a holding company in 1908, and its first brand acquisition was Buick. The company today boasts a $71 billion market cap, and in 2025 claimed a market share of the US automotive industry in excess of 17%.
A look at some numbers will show how strong GM’s position is. Last year, the company’s total auto sales came to 2.85 million vehicles, a figure that was up 6% year-over-year; two of GM’s full-size pickups, the Chevy Silverado and the GMC Sierra, led the American market for the sixth consecutive year, with combined sales of 940,000 units. GM is also doing well in the lower-end parts of the market, and last year sold almost 700,000 Buick and Chevy cars priced below $30,000.
It’s a known fact that electric vehicle sales have been declining in recent months – the Financial Times reports that the world’s auto industry has absorbed a $65 billion hit over the past year from paring back its EV production – but internal combustion engine vehicles are rising. GM, last month, announced a $46 million investment at an assembly plant in Ontario, Canada – a plant that builds Chevy Silverado trucks.
When we turn to the direct financial results, we find that GM finished 2025 with $45.3 billion in revenue for the fourth quarter, down 5% year-over-year. The fourth-quarter figure missed the forecast by $750 million. At the same time, earnings were sound – the non-GAAP EPS, at $2.51, was up some 30% year-over-year, and exceeded the forecast by 25 cents per share.
Looking ahead for this automaker, Bank of America’s Alexander Perry sees a strong future. The industry expert writes, “We believe GM is a key beneficiary of recent regulatory changes including the removal of CAFÉ penalties, and GHG relief, which is enabling a mix shift to its most margin accretive trucks/SUVs and away from unprofitable EVs. The evidence is compelling: we estimate that trucks/SUVs variable profit per unit is $17.5K vs. corporate average of $10-12K. We also believe GM should benefit in 2026 from lower warranty costs & regulatory credits, lean inventory levels, and low incentives.”
With these potential gains in mind, Perry rates GM as a Buy, with a $105 price target that implies a one-year upside of 34%. (To watch Perry’s track record, click here.)
GM’s shares are currently trading for $78.60; the average price target, at $95.76, suggests a gain of 22% for the year ahead. The stock’s Moderate Buy consensus rating is based on 19 recent recommendations that include 14 Buys, 4 Holds, and 1 Sell. (See GM stock forecast.)
Ford Motor Company
Next up, Ford, is another of Detroit’s storied names. Founded in 1903, the company has a long record of innovations: it introduced the assembly line technique to the auto industry (and to heavy manufacturing generally), and has been associated with such successful and popular vehicles as the Mustang and the F-150 truck. Ford’s F-series pickups have consistently been among the most popular vehicles in the US market for decades, and the company’s SUVs are solid money-makers.
A look at Ford’s last sales report, for February 2026, shows the trends in EV versus combustion engine sales. Ford’s February sales fell 5.5% year-over-year, but that drop was powered by a near-38% year-over-year decline in total monthly sales of EVs. EV units sold fell from 22,683 in February 2025 to 14,132 in the current report.
On the other hand, Ford’s combustion engine vehicle sales were only down, overall, by 0.1%. The company’s SUVs, the Explorer and Expedition models, showed strong year-over-year gains, of 33% and 26% respectively. And, Ford’s ever-popular Mustang showed a 54% y/y gain in sales. Overall, Ford sold nearly 150,000 vehicles last month. Fewer than 10% of those were electric vehicles.
Ford’s 4Q25 showed a top line of $45.9 billion, for a 5% year-over-year decrease. The company’s non-GAAP earnings, of 13 cents per share, missed expectations by 6 cents. However, Ford is flush with cash – the company had an adjusted free cash flow of $3.5 billion for the year, and finished 2025 with $29 billion in cash and some $50 billion in total liquidity.
In his coverage of Ford, Bank of America’s Perry writes, “We think Ford is positioned well to capitalize on the significant shift in the regulatory backdrop under the current administration that should enable it to shift focus to its most margin accretive trucks/SUVs. We expect near term benefits as Model E losses abate, and the company’s high-margin commercial business stabilizes. We expect Ford to make progress toward its 8% EBIT margin guide (from 4.8% in 2026E), including a large step-up in 2027.”
The analyst goes on to rate F as a Buy, and he sets a $17 price target that points to a 33% upside potential in the coming year.
That’s the bullish view. The Street consensus here is a Hold, based on 16 reviews that break down to 3 Buys, 12 Holds, and 1 Sell. Ford shares are trading for $12.81 currently, and have a $14.02 average target price implying that the stock will gain 9.5% in the next 12 months. (See F stock forecast.)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
