Analysts Alexander Potter and Ben Johnson at Piper Sandler forecast that limited competition from Chinese automakers, coupled with a more favorable regulatory environment, are poised to bolster the performance of U.S. automakers this year, thereby cushioning an anticipated 1.2% decline in North American vehicle sales. Potter and Johnson wrote that these conditions will catalyze "upward revisions to earnings estimates for U.S. automakers," with Ford (F.US) and General Motors (GM.US) standing to benefit the most, as both saw their ratings upgraded from "Neutral" to "Overweight." The team also raised its rating on Stellantis (STLA.US) to "Overweight," though they described the situation for the Netherlands-based automaker as "messier" due to its greater exposure to the Chinese market and lower profit margins. Ford's decision to scale back its investments in Europe and electric vehicles (along with taking a $19.5 billion impairment charge) enables it to refocus on its most profitable business segments, while also reducing compliance expenditures as CO2 emissions policies become more "lenient." Piper Sandler's updated outlook for Ford projects 2027 earnings per share (EPS) of $1.95, surpassing the consensus estimate of $1.77, and EBIT of $10.8 billion, matching post-financial crisis highs. Potter and Johnson acknowledged that General Motors has consistently been one of the top performers in their coverage, but they also admitted that "upgrading GM at this point makes us feel a bit silly." This is because GM's total return, including dividends, has outperformed the S&P 500, ranking second, third, and first over the past 12 months, 3 years, and 5 years, respectively, within Piper Sandler's coverage. Despite "largely flat" revenue, a shift in focus from electric vehicles to other models is still expected to boost General Motors' 2025 EBIT by $800 million. Furthermore, with its minimal exposure to China and a relaxation of EPA regulations, GM's performance forecasts now appear "achievable." Stellantis has seen its stock price plummet recently, accompanied by frequent management changes, and its below-average price-to-earnings ratio seems to reflect this turmoil. However, as the parent company of Jeep, Stellantis is positioned to benefit from new model launches and a "notable" joint venture with Leapmotor, which should help mitigate the impact of Chinese competitors in the European market. Potter and Johnson have now raised their target P/E multiple for Stellantis from a previous range of 3x-4x to 6x, asserting that "earnings have bottomed." The team also executed a significant upgrade for Aptiv (APTV.US) to "Overweight" and a downgrade for BorgWarner (BWA.US) to "Neutral," citing "attractive valuation" for the former and a balanced risk/reward profile for the latter.