High Grade Automotive: Weekly Road Trip

Research evidence excerpt

High Grade Automotive: Weekly Road Trip

J P M O R G A N North America Credit Research

31 July 2026

High Grade Automotive

Weekly Road Trip

Welcome to this week’s edition of the Weekly Road Trip. The JULI Automotive index North America Corporate Credit -

tightened 2bp YTD to 99bp, while JULI widened 6bp YTD to 95bp. Autos & Auto Parts and

Manufacturing (IG)

Topical This Week: AC Evan Piascik

• On Wednesday, S&P published a bulletin on Ford (see here for our earnings (1-212) 834-4432

recap note) and expressed confidence that Ford can achieve the increased evan.piascik@jpmchase.com

baseline forecast given its ability to manage mix and pricing to offset higher Max Berman

commodity costs. S&P noted that further progress toward Ford’s $1 billion (1-212) 834-2380

max.berman@jpmorgan.com

material and warranty cost savings target should support sustainable margin J.P. Morgan Securities LLC

improvement (increased its 2026 margin forecast from 5.4% to 5.7%, now

expects margins to improve to at least 7.5% and FOCF/sales to recover to over

1% in 2027) and “increase the likelihood of an outlook revision to stable in the

coming quarters.” S&P believes that additional margin improvement in 2027

and 2028 is still viable given expectations for reduced losses in Model E,

volume recovery, and reduced charges for EV restructuring. We removed Ford

from our Fallen Angel forecast following the 2Q26 earnings print on Tuesday

as our base case is for the company to remain IG (likely a 1H27 event).

• We moved our issuer rating on Stellantis to Neutral (from Overweight)

yesterday as challenges are emerging to its operational turnaround and we see

limited catalysts for near-term spread compression. STLA reported decent

2Q26 results and reaffirmed its 2026 guidance, along with the assumption of