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Zacks Investment Ideas feature highlights: General Motors, Ford and Honda

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For Immediate Release

Chicago, IL – August 11, 2023 – Today, Zacks Investment Ideas feature highlights General Motors (GM - Free Report) , Ford Motor (F - Free Report) and Honda Motor Co (HMC - Free Report) .

3 Auto Stocks to Buy for Growth & Value

Several auto stocks appear to be trading at bargain territory considering the broader sectors strengthening prospects.

The combination of easing inflation and expansion among the EV market makes these top-rated auto stocks compelling in regards to growth.

Better still, is that their valuations are very attractive at their current levels making now an ideal time to buy.  

General Motors: It certainly looks like an ideal time to invest in General Motors with its stock sporting a Zacks Rank #1 (Strong Buy).

After impressively beating second-quarter top and bottom line expectations in late July, General Motors’ stock still appears to be overlooked. General Motors’ annual earnings are now expected to be virtually flat this year and dip -5% in FY24 at $7.17 per share but this would still represent 46% EPS growth over the last five years.

Even better, earnings estimate revisions have continued to trend higher since the company’s Q2 report which is a strong indication that GM stock should have more upside ahead. Plus, General Motors stock trades at just 4.7X forward earnings with the rising EPS estimates supporting the notion that GM shares are cheap.

Ford Motor: Along with General Motors, Ford’s stock is worthy of investors’ consideration at the moment and currently sports a Zacks Rank #2 (Buy).

Ford also blasted Q2 expectations in late July with earnings projected to rise 9% this year at $2.05 per share. Fiscal 2024 earnings are expected to drop -8% after what would be a tougher to compete-against year. However, FY24 EPS projections of $1.88 per share would represent a very stellar 358% growth over the last five years with 2020 earnings at $0.41 a share.

Furthermore, EPS estimates have remained higher over the last 30 days and Ford stock trades at 6.2X forward earnings. This is an attractive discount to its industry average of 11X and the S&P 500’s 20.9X.

Honda Motor Co: Throwing a foreign automaker in the mix, Honda’s stock looks attractive with a Zacks Rank #2 (Buy).

Honda most recently crushed its fiscal first-quarter earnings expectations on Thursday. Earnings of $1.60 per share crushed Q1 estimates of $0.99 a share by 61% with sales of $33.69 billion topping estimates of $33.56 billion.

Annual earnings are anticipated to soar 33% in Honda’s current fiscal 2024 to $4.04 per share. Plus, FY25 earnings are expected to rise another 3%. Earnings estimates have remained higher and could continue to go up following Honda’s strong Q1 results. This also makes Honda stock look attractive at 7.9X forward earnings which is roughly on par with its own industry average and well below the benchmark.

Bottom Line

Investors will not want to overlook these automakers as their growth stories and valuations are very attractive. To that point, General Motors, Ford, and Honda stock appear to be poised for more upside in 2023 and remain viable long-term investments as well.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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