Ford or Stellantis: Which Auto Giant Should Be in Your Portfolio?

The auto industry is at a turning point. Legacy automakers are working to defend profits from their gas-powered vehicles while pouring billions into EVs, software and new mobility. At the same time, higher tariffs are eating into margins and competition is heating up.

U.S. legacy player Ford F has the advantage of a strong home base, backed by its Ford Pro segment and solid liquidity that can fund its EV and tech push. Italian-American automaker Stellantis STLA, on the other hand, is struggling with weak sales, shrinking profits and a leadership shake-up.

Let’s break down how Ford and Stellantis compare as investment options right now.

The Case for Ford

Ford’s vehicle lineup remains solid, led by F-series trucks, Maverick pickup and SUV models, including Escape, Explorer, Expedition, EcoSport and Edge. Its hybrid approach is aiding the company as EV adoption slows.

Two factors stand out for Ford. First, the Ford Pro segment—covering commercial vehicles, software and services—continues to shine. Strong order books, rising demand and the Super Duty truck point to lasting growth. Software and service revenues are gaining traction, with paid subscriptions up 24% year over year to 757,000 in the last reported quarter. Software services also serve as a countercyclical measure for the segment.

Second, Ford’s strong finances give it room to invest and reward shareholders. The company ended the second quarter of 2025 with $46 billion in liquidity, including $28 billion in cash. Its dividend yield above 5% is appealing for income investors, and management plans to return 40–50% of free cash flow to shareholders.

Still, challenges remain. Ford’s EV division has lost about $12 billion in the past two and a half years, including $2.17 billion in the first half of 2025. Thus, it is rewriting its electric playbook. The company is now pivoting toward a new low-cost EV platform, which CEO Jim Farley calls Ford’s next “Model T moment.”

Recalls and repairs on its gas lineup have also weighed on profits, with more than 100 recalls this year alone—the most by any automaker. Tariffs add another burden, costing $800 million in the last reported quarter. Ford expects a net $2 billion tariff hit for 2025.

The Case for Stellantis

Stellantis — the maker of Jeep, Chrysler, Fiat and Peugeot — is under pressure, especially in North America. U.S. sales have now fallen for eight straight quarters due to delayed launches, high prices and limited incentives.

Financials paint a bleak picture. In the first half of 2025, revenues dropped 13% year over year to €74.3 billion. The company swung to a net loss of €2.3 billion from a €5.6 billion profit a year earlier. Adjusted operating income slid to €500 million, with margins collapsing to 0.7% from 10%. Free cash flow turned negative at €3 billion as spending outpaced earnings. Currency pressures, tariffs and weak European light commercial sales deepened the slump.

The leadership shake-up adds uncertainty. After CEO Carlos Tavares’ exit, new chief executive Antonio Filosa will outline a turnaround plan in early 2026. Until then, visibility remains low.

Near-term risks are heavy. Stellantis projects €1.5 billion in tariff costs for 2025, with €0.3 billion already booked in the first half. Its net financial position slipped to €9 billion, while net debt rose to €6.5 billion after cash burn in the first half of 2025. Another period of negative free cash flow later this year is possible.

On the competitive front, Stellantis is lagging rivals in EVs and faces mounting competition from Chinese brands abroad. It has also pulled back from hydrogen fuel cells and Level 3 driver-assistance systems, citing cost and demand issues. While this cuts expenses, it could leave Stellantis behind in key next-generation technologies.

Price Performance & Estimates

Year to date, shares of Ford have increased 17% against Stellantis’ decline of more than 28%.

The Zacks Consensus Estimate for STLA’s 2025 EPS implies a 57% decline year over year. The EPS estimates for the current year and the next have been revised downward over the past 90 days.

The Zacks Consensus Estimate for F’s 2025 EPS implies a 37% decline year over year. EPS estimates for the current and the next year have been revised upward over the past 90 days.

Conclusion

To sum up, Ford has its share of problems — heavy EV losses, recalls and tariff costs — but it is reshaping its EV strategy and leaning on its Ford Pro business and strong balance sheet. Stellantis, by contrast, is grappling with significant financial setbacks, execution challenges and competitive disadvantages. Its recovery will depend on new CEO Antonio Filosa’s turnaround plan, which is still months away.

Until Stellantis presents a credible strategy, Ford looks like the sturdier option for investors, even if near-term challenges limit upside. Ford carries a Zacks Rank #3 (Hold), while Stellantis has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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