General Motors: Solid 2Q26 Results; Raised FY26 Adjusted EBIT Guidance on Higher Pricing and Better Warranty Costs

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General Motors: Solid 2Q26 Results; Raised FY26 Adjusted EBIT Guidance on Higher Pricing and Better Warranty Costs

Evan Piascik AC North America Credit Research

(1-212) 834-4432 21 July 2026 J P M O R G A N

evan.piascik@jpmchase.com

also raised adjusted free cash flow guidance by ~$500 million to ~$10.5 billion at the

midpoint. The balance sheet continues to appear in good shape, with GM’s $19.7 billion

automotive cash balance remaining above the company’s target automotive cash balance

of ~$18 billion. In addition, GM Financial lowered its 2026 unsecured funding plan

(including non-USD issuance) to $6-8 billion v. $8-10 billion prior ($6.5 billion issued

YTD). GM’s recent execution has been exceptional and its outperformance versus the

High Grade Automotive universe continues to support the Baa2/BBB/BBB ratings at

Moody’s/S&P/Fitch, and we would not be surprised to see positive ratings actions over

the coming quarters with GM near the rating agency upgrade triggers (Fitch has been on

positive outlook since October 2024). That said, valuations remain fair across the

structure in our view. We prefer the GM 5y bond in the GM curve trading at T+84bp or

63bp tight to Ford, near the tight end of our 60-80bp fair value range, flat to HYNMTR

and VW, and slightly tight to the BBB index (duration-adjusted). The GM 10y looks fair

to us trading at T+110bp or ~70bp tight to Ford, ~15bp tight to VW, and flat to the BBB

index. We remain Neutral General Motors and General Motors Financial at the issuer

level. Risks to our rating include tariff and trade-policy uncertainty, commodity and

DRAM inflation, further EV restructuring cash costs, supply-chain disruptions, weaker

captive-finance performance, debt-funded shareholder returns, and a broader

macroeconomic downturn.