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Auto Sector Q4 Earnings: 4 Stocks With Surprise Potential
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The fourth-quarter earnings season for the Auto-Tires-Trucks sector is underway. So far, three S&P 500 sector components— Tesla, General Motors and PACCAR— have reported quarterly numbers. While Tesla and General Motors beat earnings expectations, PACCAR matched the same.
Per the Earnings Trend report dated Jan. 23, the auto sector’s earnings for fourth-quarter 2025 are expected to decline 12.9% on a year-over-year basis. Revenues are also estimated to contract 5.7%.
With a majority of companies left to release fourth-quarter results, we have identified — with the help of the Zacks Stock Screener — a few auto players, which are positioned to outshine the Zacks Consensus Estimate this earnings season.
These include Ford (F - Free Report) , QuantumScape (QS - Free Report) , BorgWarner (BWA - Free Report) and Lear Corp. (LEA - Free Report) . Before we discuss the companies, let’s take a look at the factors shaping the quarterly performance.
Factors at Play
The U.S. auto industry lost steam in the fourth quarter after a strong run earlier in the year. Vehicle sales slowed noticeably, with the annualized pace falling to 15.6 million units from 16.4 million in the third quarter, per Cox Automotive. This made the fourth quarter the weakest period of the year.
Tariffs on imported vehicles and components continued to pressure automakers, raising costs and weighing on profitability. Inflation also remained a concern, squeezing both manufacturers and consumers. After nine months of resilient demand, these pressures finally caught up with the market. Affordability became a major issue for buyers. New vehicle prices climbed to record levels, with the average transaction price reaching $50,326 in December, according to Kelley Blue Book.
The electric vehicle (EV) market saw an even sharper slowdown. After a strong third quarter, EV demand cooled rapidly in the fourth quarter following the expiration of federal tax credits in early October. Per Cox Automotive, EV sales were 234,000 units in the fourth quarter, down 46% and 36% on a sequential and a year-over-year basis, respectively.
Overall, the fourth quarter reflected a more cautious consumer and a market adjusting to higher costs, fewer incentives and tougher economic conditions.
Picking Potential Winners
While it is not possible to be sure about which companies are well-positioned to beat earnings estimates, our proprietary methodology — Earnings ESP — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
Our research shows that for stocks with the abovementioned combination, the chances of an earnings beat are as high as 70%.
Our Choices
Ford: It is one of the leading automakers in the United States. In the fourth quarter of 2025, Ford sales rose 2.7% to more than 545,200 vehicles, while market share improved 0.9%, driven by high demand for hybrids. Hybrid sales grew 17.6% year over year to 55,374 units. Higher year-over-year deliveries of trucks and Mustang cars boosted overall volumes. Continued strength in the Ford Pro unit is expected to have boosted the results. Nonetheless, the company expects around $19.5 billion in special charges, mostly in the fourth quarter, as it restructures its U.S. EV strategy. Importantly, about $5.5 billion of this will hit cash flows, mainly through 2026 and 2027.
Ford has an Earnings ESP of +16.06% and a Zacks Rank #1. The company is scheduled to release fourth-quarter results on Feb. 10. The Zacks Consensus Estimate for Ford’s to-be-reported quarter’s earnings and automotive revenues is pegged at 17 cents per share and $41 billion, respectively. The EPS estimates for the fourth quarter have moved up by 2 cents in the past seven days. Ford surpassed earnings estimates in each of the trailing four quarters.
QuantumScape: This company has become one of the most closely watched names in the solid-state battery race. The launch of QS’ Cobra manufacturing process is better suited for large-scale, cost-efficient production. It began shipping Cobra-made B1 samples in the third quarter, now under evaluation by several leading automakers. QuantumScape’s partnership with Volkswagen, along with ceramic alliances with Corning and Murata, bodes well. Progress at its Eagle Line pilot facility and first-ever customer billings in the third quarter of 2025 signal advancing commercialization.
QuantumScape has an Earnings ESP of +17.02% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb. 11. The Zacks Consensus Estimate for QS’ to-be-reported quarter’s loss per share is 16 cents. The loss estimate for the fourth quarter has narrowed by a cent in the past 30 days. QS surpassed earnings estimates in one of the trailing four quarters, and matched on the other three occasions.
Lear: The company supplies automotive seating and electrical systems to major automakers.Lear is strengthening its position through strategic acquisitions, automation and strong program wins. Recent deals in Seating and E-Systems, along with its IDEA initiative, are driving cost efficiencies and long-term margin expansion. Robust order wins across global OEMs and expanding partnerships in China support a healthy growth pipeline.
Lear has an Earnings ESP of +1.75% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb. 4. The Zacks Consensus Estimate for LEA’s to-be-reported quarter’s earnings and revenues is pegged at $2.67 per share and $5.8 billion, respectively. The EPS estimate for the fourth quarter has moved up by 4 cents in the past seven days. Lear surpassed earnings estimates in each of the trailing four quarters.
BorgWarner: It is a global leader in clean and efficient technology solutions required for combustion, hybrid and EVs.BorgWarner’s recent program wins, particularly in China and hybrid platforms, strengthen medium-term growth visibility, while partnerships with FinDreams, onsemi and others enhance its EV and hybrid technology portfolio. The company’s acquisition of Eldor’s hybrid systems business has reinforced its position in electrified propulsion. The company’s robust 2025 profit guidance further boosts confidence.
BorgWarner has an Earnings ESP of +2.61% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb. 11. The Zacks Consensus Estimate for BWA’s to-be-reported quarter’s earnings and revenues is pegged at $1.16 per share and $3.51 billion, respectively. The EPS estimate for the fourth quarter has moved up by 1 cent in the past seven days. BWA surpassed earnings estimates in each of the trailing four quarters.
Image: Bigstock
Auto Sector Q4 Earnings: 4 Stocks With Surprise Potential
The fourth-quarter earnings season for the Auto-Tires-Trucks sector is underway. So far, three S&P 500 sector components— Tesla, General Motors and PACCAR— have reported quarterly numbers. While Tesla and General Motors beat earnings expectations, PACCAR matched the same.
Per the Earnings Trend report dated Jan. 23, the auto sector’s earnings for fourth-quarter 2025 are expected to decline 12.9% on a year-over-year basis. Revenues are also estimated to contract 5.7%.
With a majority of companies left to release fourth-quarter results, we have identified — with the help of the Zacks Stock Screener — a few auto players, which are positioned to outshine the Zacks Consensus Estimate this earnings season.
These include Ford (F - Free Report) , QuantumScape (QS - Free Report) , BorgWarner (BWA - Free Report) and Lear Corp. (LEA - Free Report) . Before we discuss the companies, let’s take a look at the factors shaping the quarterly performance.
Factors at Play
The U.S. auto industry lost steam in the fourth quarter after a strong run earlier in the year. Vehicle sales slowed noticeably, with the annualized pace falling to 15.6 million units from 16.4 million in the third quarter, per Cox Automotive. This made the fourth quarter the weakest period of the year.
Tariffs on imported vehicles and components continued to pressure automakers, raising costs and weighing on profitability. Inflation also remained a concern, squeezing both manufacturers and consumers. After nine months of resilient demand, these pressures finally caught up with the market. Affordability became a major issue for buyers. New vehicle prices climbed to record levels, with the average transaction price reaching $50,326 in December, according to Kelley Blue Book.
The electric vehicle (EV) market saw an even sharper slowdown. After a strong third quarter, EV demand cooled rapidly in the fourth quarter following the expiration of federal tax credits in early October. Per Cox Automotive, EV sales were 234,000 units in the fourth quarter, down 46% and 36% on a sequential and a year-over-year basis, respectively.
Overall, the fourth quarter reflected a more cautious consumer and a market adjusting to higher costs, fewer incentives and tougher economic conditions.
Picking Potential Winners
While it is not possible to be sure about which companies are well-positioned to beat earnings estimates, our proprietary methodology — Earnings ESP — makes it relatively simple. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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. Earnings ESP shows the percentage difference between the Most Accurate Estimate and the Zacks Consensus Estimate.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Our research shows that for stocks with the abovementioned combination, the chances of an earnings beat are as high as 70%.
Our Choices
Ford: It is one of the leading automakers in the United States. In the fourth quarter of 2025, Ford sales rose 2.7% to more than 545,200 vehicles, while market share improved 0.9%, driven by high demand for hybrids. Hybrid sales grew 17.6% year over year to 55,374 units. Higher year-over-year deliveries of trucks and Mustang cars boosted overall volumes. Continued strength in the Ford Pro unit is expected to have boosted the results. Nonetheless, the company expects around $19.5 billion in special charges, mostly in the fourth quarter, as it restructures its U.S. EV strategy. Importantly, about $5.5 billion of this will hit cash flows, mainly through 2026 and 2027.
Ford has an Earnings ESP of +16.06% and a Zacks Rank #1. The company is scheduled to release fourth-quarter results on Feb. 10. The Zacks Consensus Estimate for Ford’s to-be-reported quarter’s earnings and automotive revenues is pegged at 17 cents per share and $41 billion, respectively. The EPS estimates for the fourth quarter have moved up by 2 cents in the past seven days. Ford surpassed earnings estimates in each of the trailing four quarters.
Ford Motor Company Price and EPS Surprise
Ford Motor Company price-eps-surprise | Ford Motor Company Quote
QuantumScape: This company has become one of the most closely watched names in the solid-state battery race. The launch of QS’ Cobra manufacturing process is better suited for large-scale, cost-efficient production. It began shipping Cobra-made B1 samples in the third quarter, now under evaluation by several leading automakers. QuantumScape’s partnership with Volkswagen, along with ceramic alliances with Corning and Murata, bodes well. Progress at its Eagle Line pilot facility and first-ever customer billings in the third quarter of 2025 signal advancing commercialization.
QuantumScape has an Earnings ESP of +17.02% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb. 11. The Zacks Consensus Estimate for QS’ to-be-reported quarter’s loss per share is 16 cents. The loss estimate for the fourth quarter has narrowed by a cent in the past 30 days. QS surpassed earnings estimates in one of the trailing four quarters, and matched on the other three occasions.
QuantumScape Corporation Price and EPS Surprise
QuantumScape Corporation price-eps-surprise | QuantumScape Corporation Quote
Lear: The company supplies automotive seating and electrical systems to major automakers.Lear is strengthening its position through strategic acquisitions, automation and strong program wins. Recent deals in Seating and E-Systems, along with its IDEA initiative, are driving cost efficiencies and long-term margin expansion. Robust order wins across global OEMs and expanding partnerships in China support a healthy growth pipeline.
Lear has an Earnings ESP of +1.75% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb. 4. The Zacks Consensus Estimate for LEA’s to-be-reported quarter’s earnings and revenues is pegged at $2.67 per share and $5.8 billion, respectively. The EPS estimate for the fourth quarter has moved up by 4 cents in the past seven days. Lear surpassed earnings estimates in each of the trailing four quarters.
Lear Corporation Price and EPS Surprise
Lear Corporation price-eps-surprise | Lear Corporation Quote
BorgWarner: It is a global leader in clean and efficient technology solutions required for combustion, hybrid and EVs.BorgWarner’s recent program wins, particularly in China and hybrid platforms, strengthen medium-term growth visibility, while partnerships with FinDreams, onsemi and others enhance its EV and hybrid technology portfolio. The company’s acquisition of Eldor’s hybrid systems business has reinforced its position in electrified propulsion. The company’s robust 2025 profit guidance further boosts confidence.
BorgWarner has an Earnings ESP of +2.61% and a Zacks Rank #3. The company is scheduled to release fourth-quarter results on Feb. 11. The Zacks Consensus Estimate for BWA’s to-be-reported quarter’s earnings and revenues is pegged at $1.16 per share and $3.51 billion, respectively. The EPS estimate for the fourth quarter has moved up by 1 cent in the past seven days. BWA surpassed earnings estimates in each of the trailing four quarters.
BorgWarner Inc. Price and EPS Surprise
BorgWarner Inc. price-eps-surprise | BorgWarner Inc. Quote