Honda Motor (HMC) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3-min read

Honda Motor (HMC) closed the most recent trading day at $30.67, moving +0.26% from the previous trading session. This change lagged the S&P 500's 0.36% gain on the day.

Prior to today's trading, shares of the automaker had lost 0.82% over the past month. This has was narrower than the Auto-Tires-Trucks sector's loss of 1.39% and lagged the S&P 500's gain of 5.21% in that time.

HMC will be looking to display strength as it nears its next earnings release. On that day, HMC is projected to report earnings of $0.43 per share, which would represent year-over-year growth of 368.75%. Meanwhile, our latest consensus estimate is calling for revenue of $33.12 billion, up 4.31% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for HMC. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 3.76% lower within the past month. HMC currently has a Zacks Rank of #3 (Hold).

Digging into valuation, HMC currently has a Forward P/E ratio of 8.47. For comparison, its industry has an average Forward P/E of 10.43, which means HMC is trading at a discount to the group.

Meanwhile, HMC's PEG ratio is currently 0.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HMC's industry had an average PEG ratio of 0.5 as of yesterday's close.

The Automotive - Foreign industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 67, putting it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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