Investing.com — Barclays raised its stance on the U.S. autos and mobility sector to Neutral from Negative, saying the industry has withstood tariff pressures better than feared, while resilient sales and easing electric-vehicle rules create openings for automakers.
The brokerage upgraded General Motors and Aptiv to Overweight, setting new price targets of $73 and $105, up from $55 and $85, respectively.
Barclays said it now prefers automakers to suppliers, given benefits from looser U.S. emissions standards, steady pricing and stable production.
“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,” Barclays analysts said.
“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.”
U.S. light vehicle sales, measured by the seasonally adjusted annualized rate, have run at 16.5 million this year, ahead of Barclays’ earlier forecast of 14.5 million.
The bank now sees 2025 SAAR projection to 16.2 million. Global vehicle production has also proven steadier than expected, with North American forecasts revised higher since April.
Barclays said weaker emissions standards under the Trump administration are a “significant tailwind to OEM profitability,” reducing the need to sell unprofitable EVs and cutting costs tied to regulatory credits.
GM is likely losing $4-5 billion a year on EVs but could narrow those losses by at least $1 billion.
For Aptiv, Barclays said there is improved near-term business trends and potential value creation from the planned spin of its electrical distribution systems unit.
“While both stocks (and the broader autos complex) have outperformed of late, we still see further upside potential”
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