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Honda Motor (HMC) Gains As Market Dips: What You Should Know

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Zacks Equity Research
·3 min read
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Honda Motor (HMC) closed the most recent trading day at $30.14, moving +0.37% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.55%. Meanwhile, the Dow lost 0.01%, and the Nasdaq, a tech-heavy index, lost 2.01%.

Coming into today, shares of the automaker had gained 7.1% in the past month. In that same time, the Auto-Tires-Trucks sector lost 2.69%, while the S&P 500 gained 0.84%.

HMC will be looking to display strength as it nears its next earnings release. In that report, analysts expect HMC to post earnings of $0.50 per share. This would mark year-over-year growth of 412.5%. Meanwhile, our latest consensus estimate is calling for revenue of $34.9 billion, up 9.92% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.91 per share and revenue of $124.56 billion, which would represent changes of +21.76% and -9.31%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for HMC. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 7.5% higher. HMC is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, HMC is holding a Forward P/E ratio of 10.31. This valuation marks a discount compared to its industry's average Forward P/E of 10.67.

Meanwhile, HMC's PEG ratio is currently 0.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Automotive - Foreign stocks are, on average, holding a PEG ratio of 0.99 based on yesterday's closing prices.

The Automotive - Foreign industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 94, which puts it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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