F vs. GM: Which Legacy Automaker Looks Stronger Ahead of Q2 Earnings?

As the second-quarter 2025 earnings season approaches for the auto sector, investors are closely watching U.S. auto giants Ford F and General Motors GM to determine which stock is better positioned ahead of results. GM is scheduled to report earnings next Tuesday, while Ford will release its quarterly results on July 30.Q2 Earnings Whispers for General Motors and FordThe Zacks Consensus Estimate for GM’s to-be-reported quarter’s earnings and revenues is pegged at $2.44 per share and $45.34 billion, respectively. In the trailing four quarters, the company surpassed EPS estimates on all occasions, with the average earnings surprise being 10.16%.General Motors Company Price and EPS Surprise General Motors Company price-eps-surprise | General Motors Company QuoteThe consensus mark for F’s EPS and sales are 30 cents and $41.5 billion, respectively. Ford’s earnings surprise history isn’t that solid. In the past four quarters, the company beat the estimates twice, missed once and matched on the other.Ford Motor Company Price and EPS Surprise Ford Motor Company price-eps-surprise | Ford Motor Company QuoteOur proprietary model does not conclusively predict an earnings beat for either of the companies this time around.The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. General Motors carries a Zacks Rank #3 and has an Earnings ESP of -4.05%.Ford has an Earnings ESP of -36.59% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.(Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)U.S. Vehicle Deliveries of F & GM in Q2Ford sold 612,095 vehicles in the quarter under discussion, up 14.2% from the year-ago period. Strong demand for trucks and hybrids drove the volumes. F-Series truck sales surged 11.5% to 222,459 units. Maverick witnessed the best quarter ever with 48,041 units, up 26.3% year over year. Sales of electrified vehicles (including pure EVs and hybrids) were up 6.6% to 82,886 units in the second quarter of 2025. However, fully electric cars saw a 31% decline in sales, while hybrid volumes soared 23.5%.General Motors sold 746,588 units, up 7.3% year on year. Sales were up across all GM brands—Chevrolet, Cadillac, Buick and GMC. Chevrolet, GMC and Cadillac sales increased 5.8%, 6.3% and 15.3%, respectively. Buick is GM’s fastest-growing brand so far this year, with sales growing 19.3% in the second quarter and 29.2% in the first half of 2025. EV sales rocketed 111% to 46,280 units in the quarter under discussion.Electrification Strides of General Motors and FordThe Detroit automaker accelerated electric vehicle sales and market share in the first half of the year, thanks to expanded electric offerings across three of its four brands. The company’s diverse lineup, including the Chevy Equinox EV, Cadillac Lyriq, Optiq, Cadillac Escalade and GMC Hummer EV, is driving sales. Chevy Equinox EV topped Ford’s Mustang Mach-E sales in the first half of 2025 to become the best-selling non-Tesla EV in America. General Motors’ deals with Vianode, Lithium Americas, LG Chemical, POSCO Chemical and Livent have boosted its EV supply chain, aligning with its long-term electrification goals.While Ford’s EV sales dropped year over year in the second quarter of 2025, the automaker’s hybrid strategy is also noteworthy. The Model-e segment faces near-term headwinds. After over $5 billion in losses in its EV business in 2024, Ford expects to incur huge losses in the division this year as well. However, Ford appears strategically positioned for long-term growth, driven by the strong momentum in hybrid sales, efforts to scale operations, adoption of digital tools to boost manufacturing efficiency, and a focus on vertical integration through insourcing of key components.Tariff Impact on F and GMFord has cited a potential $2.5 billion impact from U.S. President Trump's tariffs. While Ford aims to offset $1 billion of this through strategic actions, it is expected to take a hit of $1.5 billion in 2025. Meanwhile, General Motors anticipates a profit impact of $4-$5 billion due to tariffs on imported vehicles and auto parts. Dividend ComparisonFord has a high dividend yield of more than 5%, way better than the broader industry’s yield of 0.3% on average. Ford’s yield also compares much better than GM’s 1.13%. Image Source: Zacks Investment ResearchFord targets distributions of 40-50% of FCF going forward, demonstrating its commitment to shareholder return. Its high dividend yield provides some buffer against the stock’s volatility and could entice those seeking steady income amid uncertain market conditions.How Does the Consensus Estimate Stack Up For F and GM?The Zacks Consensus Estimate for GM and F’s 2025 EPS implies a year-over-year decline of 12.3% and 40%, respectively. However, Ford’s 2026 EPS is expected to grow 13.4%, compared with a 2.7% rise for GM from the projected 2025 levels. Looking at the recent estimate revisions, Ford seems to be placed better than GM. GM has seen its 2025 EPS estimate move south by a cent to $9.30 in the past 30 days. Meanwhile, Ford’s 2025 EPS estimate has stayed at $1.11 over the same timeframe.Stock Performance & ValuationYear to date, shares of Ford have risen 20%, while GM’s stock price has remained almost unchanged. Image Source: Zacks Investment ResearchIn terms of value, GM stock checks the box at just 5.65X forward earnings. Still, Ford’s 9.94X forward earnings multiple offers a discount to the auto sector’s average of 25.82X. Plus, Ford and GM stock trade at less than 1X forward sales. Bottom LineWhile both Ford and GM are making critical moves in electrification and cost optimization, Ford appears better positioned heading into Q2 earnings. Despite short-term EV headwinds, Ford’s hybrid momentum, shareholder-friendly capital return policy, better earnings outlook, and solid stock performance year to date give it an edge over its cross-town rival. GM’s strength in EV sales and brand diversification is notable, but higher tariff exposure tempers the bull case. With a better Zacks Rank and stronger dividend yield, Ford takes the lead in this legacy automaker face-off.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ford Motor Company (F): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks