From today's Member Chat:
With GM’s (6.5x!) pop today, both F (9x) and STLA (6x) look interesting:
🛳️ This is exactly the kind of comparative analysis that can lead to outsized gains if you get the setup right. Let me break down why STLA at 6x earnings might actually be the stronger play ahead of their October 30 earnings, despite Ford looking “safer” on the surface.
What GM Just Told Us This Morning 🚗💨
GM’s Q3 2025 Results (reported today):cnbc+2
- EPS: $2.80 vs $2.31 expected = +21% beat
- Revenue: $48.59B vs $45.27B expected = +7% beat
- Adj EBITDA: $3.38B vs $2.72B expected = +24% beat
- Stock reaction: +10% surge this morning
The Key Messages for the Auto Sector:
1. Tariff Impact Lower Than Feared
GM cut its full-year tariff cost estimate to $3.5-4.5B (from $4-5B prior)tokenist+1
- Trump’s MSRP offset program provides 3.75% relief on US-made vehicles
- GM expects to offset 35% of tariff impact through mitigation strategies
- Translation: Tariffs are manageable, not apocalyptic
2. Strong US Demand for Trucks/SUVs
- Q3 sales: 710,347 units (+8% YoY)tokenist
- Best US market share since 2017
- Silverado/Yukon demand robust; incentives at just 4% (vs 6.9% industry avg)
- Translation: US consumer still buying big-ticket vehicles
3. Pricing Power Intact
GM maintained pricing discipline despite tariff coststokenist
- Translation: Manufacturers can pass costs to consumers (for now)
4. Guidance Raised Substantially
- Full-year EBIT: $12-13B (up from $10-12.5B)finance.yahoo
- Adj automotive FCF: $10-11B (up from $7.5-10B)
- Adj EPS: $9.75-10.50 (up from $8.25-10.00)
What This Means for Ford and Stellantis:
If GM — which has the highest tariff exposure of the Detroit Three — just raised guidance and beat by 20%+, then F and STLA should benefit from the same tailwinds: tariff mitigation, strong truck demand, and pricing power.
Ford (F) vs Stellantis (STLA): The Valuation Gap 📊
Current Metrics
MetricFord (F)Stellantis (STLA)
Price~$11.50~$10.69
P/E (TTM)9x6x
Forward P/E~8x~4.1xfinance.yahoo
