Wells Fargo rates Ford, GM as overweight, praises new electric vehicles

Published Mon, Apr 5 202110:11 AM EDTUpdated Mon, Apr 5 202110:18 AM EDT

Jesse Pound @/in/jesse-pound @jesserpound

Legacy automakers Ford and General Motors are set to be industry leaders once again as electric vehicles and autonomous driving come into focus, according Wells Fargo. The firm's analyst Colin Langan initiated coverage of both stocks on Monday with overweight ratings, praising the new and upcoming electric vehicles for the stalwart companies. "Ford's EV strategy has historically been met with significant skepticism; however, in our view the Mustang Mach-E is very compelling proof that Ford is serious about EVs," the note said. For GM, Langan pointed to the upcoming electric vehicle lineup, including the new Hummer, and the company's autonomous driving feature, Super Cruise, as proof that the company was emerging as a leader in the next generation of cars. "The system used driver monitoring to ensure the driver is alert and will warn drivers that are not paying attention," the note said of Super Cruise. "This is important as an increasing number of accidents are occurring when drivers stop paying attention while these systems operate. GM says that 85% of its car owners want Super Cruise in their car, so it could serve to build higher customer loyalty." Wells set price targets of $67 per share for GM and $15 per share for Ford. On Monday morning, GM was trading around $59 per share, while Ford's share price hovered around $12 a share. Langan also said he was bullish on the turnaround story at Ford, led by new CEO Jim Farley. "Ford is no longer focused on having a product for all markets, but rather focused on delivering products in segments with competitive strength — pickups & SUVs. Ford N America has one of the strongest lineups in decades with a refreshed F-150, the Mustang Mach E, & new Broncos," the note said. GM and Ford have been hot stocks in 2021, seeing surges around new car announcements as the excitement about electric cars spreads from the startups to larger companies. Ford shares jumped 41% and GM rose nearly 43% year to date, while shares of Tesla and Chinese automaker Nio were both in negative territory for 2021 as of April 5.

2022 GMC Hummer EV sport utility truck "Edition 1"

Legacy automakers Ford and General Motors are set to be industry leaders once again as electric vehicles and autonomous driving come into focus, according Wells Fargo.

The firm's analyst Colin Langan initiated coverage of both stocks on Monday with overweight ratings, praising the new and upcoming electric vehicles for the stalwart companies.