TD Cowen initiated coverage on the U.S. autos and mobility sector, assigning Buy ratings to General Motors (GM, Financials) and Tesla (TSLA, Financials), citing growth opportunities amid weak market sentiment.

Reflecting pessimism about the industry, the company observed that U.S. auto companies are trading at historically low valuation multiples. Analysts said that over-extrapolation in the sector and groupthink might provide investment purchasing prospects.

Among investing themes that can cause outperformance, TD Cowen underlined strong demand for U.S. cars, the resilience of defensive brands like North American pickup trucks, and the long-term potential of artificial intelligence and autonomous vehicle technologies. The company thinks these elements might release significant industry value.

With analysts rating a price target of $105 per share, the most among Wall Street projections, General Motors came out as TD Cowen's top option. Key motivations for development mentioned by the corporation were its long-term plan and turning around capacity.

With analysts pointing to a recent drop in its stock price and expected factors influencing its path, Tesla also got a Buy rating.

Beyond manufacturers, TD Cowen named Aptiv (APTV, Financials) the best supplier choice with a Buy recommendation. Ford (F, Financials), meanwhile, received a Hold rating.

Ahead, the company projects U.S. car sales will recover to 16.5 million vehicles in 2025 and 17.1 million in 2026. Although tariffs on Mexico and Canada carry certain short-term hazards, TD Cowen thinks they are unlikely to become permanent.