The outlook for the US auto industry is improving, according to Barclays, which upgraded shares of General Motors and Aptiv on Friday.
Analyst Dan Levy raised his rating on both companies to Buy from Hold and shifted his broader industry view to Neutral from Negative, citing better-than-expected resilience in the face of tariffs.
The upgrade reflects a notable change in sentiment for a sector that has been weighed down by trade policy concerns and rising costs.
Levy also boosted his price targets, lifting GM to $73 from $55 a share and Aptiv to $105 from $85.
Tariff relief provides a boost
Levy said his earlier bearish stance on autos was tied to the potential financial hit from tariffs on cars and car parts, which threatened to wipe out billions in operating profits.
However, conditions have turned out less severe than initially feared.
The Trump administration provided tariff relief on parts from Canada and Mexico, and several countries negotiated 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,” Levy wrote in his note.
“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.”
The improvement in the policy landscape has helped stabilize expectations for automakers and suppliers, supporting the case for select upgrades within the group.
Market performance and analyst views
GM shares rose 0.9% to $59.25 in Friday trading, compared with a 0.1% gain in the S&P 500 and a 0.1% decline in the Dow Jones Industrial Average.
Aptiv stock slipped 0.6% on the day but remains up sharply this year.
Coming into Friday, GM shares had gained about 10% year to date, while Aptiv was up 38%.
The sector’s performance has been mixed overall, but Levy’s upgrades highlight a growing view that some companies are positioned to weather challenges better than others.
Analysts remain divided but generally constructive on the two stocks.
According to FactSet, 57% of analysts covering GM rate it Buy, compared with the S&P 500 average of about 55%.
The average target price for GM is roughly $58, below Levy’s revised $73 forecast.
For Aptiv, 68% of analysts rate the stock Buy, with an average target price of about $88, also below Barclays’ new $105 projection.
Valuations and structural changes
Despite recent gains, both companies continue to trade at relatively low valuation multiples compared with the broader market.
GM trades at about six times estimated 2026 earnings, while Aptiv trades at roughly 10 times.
By contrast, the S&P 500’s multiple is closer to 21 times.
Aptiv is undergoing a strategic split into two companies, with one business focused on electrical components and the other on safety and software solutions.
Investors are optimistic the latter could attract higher valuation multiples by diversifying away from traditional auto parts and tapping into faster-growing technology-driven markets.
For GM, continued execution and resilience against trade-related pressures remain central to investor confidence.
With tariffs less disruptive than anticipated and valuations still modest, Barclays’ upgrades underscore a more balanced outlook for the US auto industry.
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