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Honda (HMC) to Report Q2 Earnings: What's in the Cards?
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Honda Motor Co., Ltd. (HMC - Free Report) is expected to report second-quarter fiscal 2019 (ended September 2018) results on Oct 30. In the last reported quarter, the company delivered a positive surprise of 19.2%. In fact, Honda surpassed expectations in each of the trailing four quarters, with an average beat of 39.7%.
Honda has an expected long-term growth rate of 2.9%. In the past three months, shares of Honda have outperformed the industry it belongs to. While the stock has lost 13.2%, the industry declined 20.1%.
Let’s see, how things are shaping up for this announcement.
Honda outlined its Vision 2030 strategy which is aimed at boosting research and development, and procurement and manufacturing while cutting down on development costs. By 2025, it plans to launch autonomous vehicles on road. The company also aims to roll out electric vehicles capable of 15-minute charging in 2022, which is likely to eliminate one of the biggest hurdles of battery-powered cars.
The company is collaborating with companies to expand business. Partnerships for the development of autonomous and electric vehicles are allowing Honda to offer latest technologies and expand its business.
However, Honda is witnessing elevated expenses, which are weighing on its profit margin. Further, cases of frequent vehicle recall are creating headwinds for the company.
Earnings Whispers
Our proven model does not conclusively show that Honda is likely to beat on earnings in this reporting cycle. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: Honda has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 79 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Honda currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially, when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few auto stocks worth considering, comprising the right combination of elements to deliver an earnings beat this time around:
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.46% and a Zacks Rank of 2. The company will report third-quarter 2018 financial figures on Oct 30.
Fox Factory Holding Corp. (FOXF - Free Report) has an Earnings ESP of +2.77% and a Zacks Rank #3. The company’s third-quarter 2018 financial results are expected to be released on Nov 7.
Meritor, Inc. has an Earnings ESP of +2.36% and is a Zacks #3 Ranked player. The company’s third-quarter 2018 financial numbers are expected to be announced on Nov 14.
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Honda (HMC) to Report Q2 Earnings: What's in the Cards?
Honda Motor Co., Ltd. (HMC - Free Report) is expected to report second-quarter fiscal 2019 (ended September 2018) results on Oct 30. In the last reported quarter, the company delivered a positive surprise of 19.2%. In fact, Honda surpassed expectations in each of the trailing four quarters, with an average beat of 39.7%.
Honda has an expected long-term growth rate of 2.9%. In the past three months, shares of Honda have outperformed the industry it belongs to. While the stock has lost 13.2%, the industry declined 20.1%.
Let’s see, how things are shaping up for this announcement.
Honda Motor Co., Ltd. Price and EPS Surprise
Honda Motor Co., Ltd. Price and EPS Surprise | Honda Motor Co., Ltd. Quote
Factors Influencing This Quarter
Honda outlined its Vision 2030 strategy which is aimed at boosting research and development, and procurement and manufacturing while cutting down on development costs. By 2025, it plans to launch autonomous vehicles on road. The company also aims to roll out electric vehicles capable of 15-minute charging in 2022, which is likely to eliminate one of the biggest hurdles of battery-powered cars.
The company is collaborating with companies to expand business. Partnerships for the development of autonomous and electric vehicles are allowing Honda to offer latest technologies and expand its business.
However, Honda is witnessing elevated expenses, which are weighing on its profit margin. Further, cases of frequent vehicle recall are creating headwinds for the company.
Earnings Whispers
Our proven model does not conclusively show that Honda is likely to beat on earnings in this reporting cycle. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Earnings ESP: Honda has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 79 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Honda currently carries a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially, when the company is witnessing negative estimate revisions.
Stocks to Consider
Here are a few auto stocks worth considering, comprising the right combination of elements to deliver an earnings beat this time around:
Cummins Inc. (CMI - Free Report) has an Earnings ESP of +1.46% and a Zacks Rank of 2. The company will report third-quarter 2018 financial figures on Oct 30.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory Holding Corp. (FOXF - Free Report) has an Earnings ESP of +2.77% and a Zacks Rank #3. The company’s third-quarter 2018 financial results are expected to be released on Nov 7.
Meritor, Inc. has an Earnings ESP of +2.36% and is a Zacks #3 Ranked player. The company’s third-quarter 2018 financial numbers are expected to be announced on Nov 14.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>