It’s been six months since President Donald Trump’s administration first announced a 25% tariff on vehicles imported into the U.S. Over the months, the impact on car makers, especially those that are foreign-based, has become very clear.
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For instance, Japanese carmaker Honda (HMC), which is also the biggest motorcycle manufacturer in the world, saw its operating profit plunge over 50% year-on-year. In reaction to the tariffs, automobile manufacturers have been ramping up their U.S. production bases to galvanize their businesses.
However, Barclays (BCS) on Friday improved its outlook on the U.S. autos and mobility sector. The universal banking giant noted that it was “positively surprised” at the extent to which the industry has been unyielding amid the volatile tariff environment.
Consumers Drive Resilience
The London-based banking group noted that while the production and sales of light vehicles—like sedans, hatchbacks, coupes, SUVs, minivans, and light-duty pickup trucks—did see some ruffling, consumers have largely remained undeterred. This is even as manufacturers sought alternative ways to offset the cost of tariffs on their production.
Consequently, Barclays raised its outlook on the industry from Negative to Neutral. The banker also boosted its rating of the stocks of Michigan-based car maker General Motors (GM) and Irish-American automotive tech supplier Aptiv (APTV) from Equal Weight to Overweight.
This means that it now expects better than average results from both stocks going forward. The two shares joined others that already currently hold an Overweight rating from the institution: safety system manufacturer Autoliv (ALV), powertrain system designer BorgWarner (BWA), and vehicle propulsion supplier Dana (DAN).
How Are General Motors and Aptiv Doing?
However, the new rating on General Motors comes at a time when the legacy automaker is looking to scale down its electric vehicle (EV) production. Despite record August sales, GM has said it will stop making two Cadillac EVs (Lyriq and Vistiq) at its Spring Hill plant in Tennessee by December 2025. Top executives have also been selling off parts of their shares in the company.
General Motors has a Strong Buy consensus recommendation on TipRanks based on 12 Buys, four Holds, and two Sells by 18 Wall Street analysts over the last three months. The average GM price target of $59 indicates a marginal 0.49% growth potential from its current level.
On the other hand, Aptiv, which produces advanced software and hardware systems for the automotive industry, recently netted strong second-quarter results that surpassed consensus estimates. Its revenue rose 2% year-over-year to reach $5.2 billion, driven by increased adoption of its components and systems by automakers.
On TipRanks, Aptiv’s shares have a Moderate Buy consensus rating based on eight Buy, three Hold, and one Sell recommendations by 12 Wall Street analysts over the past three months. The average APTV price target of $88.91 points to a possible 6.20% rise from the current price.
Trump Tariffs: Stocks That Could Benefit in 2025
As Trump’s administration continues to leverage tariffs to negotiate trade deals internationally, knowing which stocks offer the best investment opportunity is important. TipRanks’ Stock Comparison tool provides insight into which stocks provide the most attractive investment option amid this volatile market environment. Kindly see the graph below.
Compare more stocks that could benefit from Trump tariffs here.