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Ford vs. General Motors: Which Stock Looks Stronger After Q3?
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Key Takeaways
GM appears a better pick after Q3, with better earnings momentum, digital growth and a lighter debt load.
General Motors raised its 2026 free cash flow outlook to $11.5-$12.5 billion and announced a $20B buyback.
Ford offers a roughly 5% dividend yield, but margin pressure, rising costs and a flat outlook limit upside.
When it comes to iconic American automakers, General Motors (GM - Free Report) and Ford (F - Free Report) remain two of the strongest pillars of the industry. Both have weathered economic cycles, pushed forward on innovation, and are navigating the complex transition toward electric and software-defined vehicles. Both companies delivered better-than-expected results in the third quarter of 2026.
Over the past six months, GM has surged 22%, outperforming Ford's growth of 10%. Let's take a closer look at their fundamentals, growth prospects and challenges to figure out which stock is a better investment option now.
Q3 Results Review
Ford's third-quarter 2026 adjusted EPS of 49 cents surpassed the Zacks Consensus Estimate of 39 cents and grew from 45 cents recorded in the year-ago quarter. The company's consolidated third-quarter revenues came in at $49.5 billion, down 2% year over year. F's total automotive revenues came in at $46.08 billion, beating the Zacks Consensus Estimate of $45.67 billion but declining 2.3% year over year.
The company saw its EBIT margins contract across all three segments—Ford Blue, Ford Model e and Ford Pro. Management highlighted continued expansion in software services and parts, which together represented approximately 10% of consolidated quarterly revenues.
Ford Motor Company Price, Consensus and EPS Surprise
General Motors' third-quarter 2026 adjusted EPS of $3.70 beat the Zacks Consensus Estimate of $3.55 and increased 32% year over year. Revenues of $50.02 billion topped the Zacks Consensus Estimate of $48.21 billion and rose 2.9% year over year.
General Motors’ North America business gained momentum with growing sales and profits. GMNA's adjusted EBIT margin improved 250 basis points to 8.7%, within management's 8-10% target. GM's expanding software business was a major highlight of the quarter. OnStar's deferred revenues reached $6.8 billion in third-quarter 2026, up 40% year over year, while recognized revenues exceeded $800 million and Super Cruise revenues grew nearly 60%. That said, the company’s international operations faced margin pressure amid high costs.
General Motors Company Price, Consensus and EPS Surprise
GM expects digital revenues to top $3 billion in 2026, driven by roughly 1 million more OnStar subscribers and over 850,000 Super Cruise subscribers. It raised its adjusted automotive free cash flow guidance to $11.5-$12.5 billion and narrowed adjusted EBIT to $14.5-$15.5 billion, with EPS of $12.75-$13.75. Warranty savings should land near the high end of $1-$1.5 billion, offsetting about $2 billion of commodity inflation. Double-digit digital growth is expected in 2027.
Ford raised the lower end of its 2026 adjusted EBIT guidance to $10.5-$11 billion. Adjusted free cash flow is unchanged at $6-$7 billion, with capital spending of $9.5-$10.5 billion. It expects Ford Blue EBIT of about $5.5 billion, Ford Pro EBIT of about $7 billion, and Model e losses near $4 billion. Commodity headwinds have risen to roughly $2.5 billion, but Ford remains on track for $1 billion in cost reductions.
Diversification Opportunities
Both automakers are building revenue streams beyond vehicle sales. GM is expanding GM Energy (charging and storage), GM Insurance and GM Defense, where multiyear contracts support expected annual revenue growth above 30% with double-digit margins.
Ford Energy applies its battery expertise to energy storage, with an EDF Power Solutions agreement and 20 GWh of capacity targeted by late 2027. Over 80% of 2028 capacity is already contracted or in late-stage negotiations, backed by utility, solar and data center demand.
Balance Sheet
Both automakers possess strong liquidity to weather short-term challenges. General Motors had total automotive liquidity of $37.1 billion as of Sept. 30, 2026, including around $23.1 billion of cash/cash equivalents/marketable debt securities. Ford ended the third quarter of 2026 with more than $46.4 billion in liquidity, including $25.3 billion in cash. However, GM displays a lower long-term debt-to-capitalization ratio compared to Ford.
Image Source: Zacks Investment Research
Dividend and Buyback Appeal
Ford has a high dividend yield of roughly 5%, way better than the S&P 500's yield of 1.3%, on average. Meanwhile, GM has a dividend yield of less than 1%.
In the last reported quarter, General Motors announced a new $20 billion multiyear share repurchase authorization. GM's strategy has effectively reduced its outstanding shares, boosting per share earnings and enhancing shareholder value.
A Look Into Valuation
F is trading at a forward earnings multiple of 6.74X, below its median of 7.27X over the last five years. GM's forward earnings multiple sits at 6.43X, higher than its median of 5.52X over the last five years.
Image Source: Zacks Investment Research
What Do Estimates for GM & F Say?
The consensus mark for Ford's 2026 EPS implies year-over-year growth of 74.3%. The EPS estimate for 2027 indicates a contraction of 1.3% from the 2025 projected figures.
The consensus mark for GM's 2026 EPS implies a year-over-year increase of 26%. The EPS estimate for 2027 calls for an uptick of 9% from the 2026 projected figures.
Our Take
Both automakers delivered solid third-quarter beats and have the liquidity to handle near-term pressure, but GM appears the better investment. Its momentum is stronger, its earnings outlook is improving, and its growing software and digital business is building a more predictable, higher-quality revenue base. Management’s confidence shows in raised cash flow guidance and a large buyback commitment, while a lighter debt load adds stability. Ford’s dividend is attractive, but margin pressure, rising costs and a flat earnings outlook limit its upside.
Though both stocks carry a Zacks Rank #3 (Hold), GM’s stronger growth path makes it our pick.
View the Zacks #1 Rank List
Image: Bigstock
Ford vs. General Motors: Which Stock Looks Stronger After Q3?
Key Takeaways
When it comes to iconic American automakers, General Motors (GM - Free Report) and Ford (F - Free Report) remain two of the strongest pillars of the industry. Both have weathered economic cycles, pushed forward on innovation, and are navigating the complex transition toward electric and software-defined vehicles. Both companies delivered better-than-expected results in the third quarter of 2026.
Over the past six months, GM has surged 22%, outperforming Ford's growth of 10%. Let's take a closer look at their fundamentals, growth prospects and challenges to figure out which stock is a better investment option now.
Q3 Results Review
Ford's third-quarter 2026 adjusted EPS of 49 cents surpassed the Zacks Consensus Estimate of 39 cents and grew from 45 cents recorded in the year-ago quarter. The company's consolidated third-quarter revenues came in at $49.5 billion, down 2% year over year. F's total automotive revenues came in at $46.08 billion, beating the Zacks Consensus Estimate of $45.67 billion but declining 2.3% year over year.
The company saw its EBIT margins contract across all three segments—Ford Blue, Ford Model e and Ford Pro. Management highlighted continued expansion in software services and parts, which together represented approximately 10% of consolidated quarterly revenues.
Ford Motor Company Price, Consensus and EPS Surprise
Ford Motor Company price-consensus-eps-surprise-chart | Ford Motor Company Quote
General Motors' third-quarter 2026 adjusted EPS of $3.70 beat the Zacks Consensus Estimate of $3.55 and increased 32% year over year. Revenues of $50.02 billion topped the Zacks Consensus Estimate of $48.21 billion and rose 2.9% year over year.
General Motors’ North America business gained momentum with growing sales and profits. GMNA's adjusted EBIT margin improved 250 basis points to 8.7%, within management's 8-10% target. GM's expanding software business was a major highlight of the quarter. OnStar's deferred revenues reached $6.8 billion in third-quarter 2026, up 40% year over year, while recognized revenues exceeded $800 million and Super Cruise revenues grew nearly 60%. That said, the company’s international operations faced margin pressure amid high costs.
General Motors Company Price, Consensus and EPS Surprise
General Motors Company price-consensus-eps-surprise-chart | General Motors Company Quote
Outlook
GM expects digital revenues to top $3 billion in 2026, driven by roughly 1 million more OnStar subscribers and over 850,000 Super Cruise subscribers. It raised its adjusted automotive free cash flow guidance to $11.5-$12.5 billion and narrowed adjusted EBIT to $14.5-$15.5 billion, with EPS of $12.75-$13.75. Warranty savings should land near the high end of $1-$1.5 billion, offsetting about $2 billion of commodity inflation. Double-digit digital growth is expected in 2027.
Ford raised the lower end of its 2026 adjusted EBIT guidance to $10.5-$11 billion. Adjusted free cash flow is unchanged at $6-$7 billion, with capital spending of $9.5-$10.5 billion. It expects Ford Blue EBIT of about $5.5 billion, Ford Pro EBIT of about $7 billion, and Model e losses near $4 billion. Commodity headwinds have risen to roughly $2.5 billion, but Ford remains on track for $1 billion in cost reductions.
Diversification Opportunities
Both automakers are building revenue streams beyond vehicle sales. GM is expanding GM Energy (charging and storage), GM Insurance and GM Defense, where multiyear contracts support expected annual revenue growth above 30% with double-digit margins.
Ford Energy applies its battery expertise to energy storage, with an EDF Power Solutions agreement and 20 GWh of capacity targeted by late 2027. Over 80% of 2028 capacity is already contracted or in late-stage negotiations, backed by utility, solar and data center demand.
Balance Sheet
Both automakers possess strong liquidity to weather short-term challenges. General Motors had total automotive liquidity of $37.1 billion as of Sept. 30, 2026, including around $23.1 billion of cash/cash equivalents/marketable debt securities. Ford ended the third quarter of 2026 with more than $46.4 billion in liquidity, including $25.3 billion in cash. However, GM displays a lower long-term debt-to-capitalization ratio compared to Ford.
Image Source: Zacks Investment Research
Dividend and Buyback Appeal
Ford has a high dividend yield of roughly 5%, way better than the S&P 500's yield of 1.3%, on average. Meanwhile, GM has a dividend yield of less than 1%.
In the last reported quarter, General Motors announced a new $20 billion multiyear share repurchase authorization. GM's strategy has effectively reduced its outstanding shares, boosting per share earnings and enhancing shareholder value.
A Look Into Valuation
F is trading at a forward earnings multiple of 6.74X, below its median of 7.27X over the last five years. GM's forward earnings multiple sits at 6.43X, higher than its median of 5.52X over the last five years.
Image Source: Zacks Investment Research
What Do Estimates for GM & F Say?
The consensus mark for Ford's 2026 EPS implies year-over-year growth of 74.3%. The EPS estimate for 2027 indicates a contraction of 1.3% from the 2025 projected figures.
The consensus mark for GM's 2026 EPS implies a year-over-year increase of 26%. The EPS estimate for 2027 calls for an uptick of 9% from the 2026 projected figures.
Our Take
Both automakers delivered solid third-quarter beats and have the liquidity to handle near-term pressure, but GM appears the better investment. Its momentum is stronger, its earnings outlook is improving, and its growing software and digital business is building a more predictable, higher-quality revenue base. Management’s confidence shows in raised cash flow guidance and a large buyback commitment, while a lighter debt load adds stability. Ford’s dividend is attractive, but margin pressure, rising costs and a flat earnings outlook limit its upside.
Though both stocks carry a Zacks Rank #3 (Hold), GM’s stronger growth path makes it our pick.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.