We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain Honda Motor (HMC) Stock Now
Read MoreHide Full Article
Honda (HMC - Free Report) is a leading manufacturer of automobiles and the largest producer of motorcycles in the world. The automaker is poised to benefit from its expanding lineup of electric vehicles, frequent collaborations to expand the business and cost-containment efforts. However, high R&D expenses on advanced technologies and alternative fuels remain a concern.
The Zacks Consensus Estimate for Honda’s 2024 earnings per share is pegged at $3.91, implying a rise of 29% from the year-ago reported number.
Let us discuss the factors that highlight why investors should retain the stock.
Growth Indicators
Honda’s 2030 Vision, which emphasizes electrified mobility products, bodes well. Its sharp focus on providing attractive products with an expanding lineup of electric vehicles (“EVs”) in light of changing circumstances in the automobile industry is likely to boost prospects. Japan’s auto giant targets EVs to account for 20% of sales in Japan and 40% of sales in North America and China by the decade’s end. Honda plans to launch Acura ZDX and Honda Prologue in North America by early 2024. It also plans to introduce 10 models in the next five years underits e:N series.
Honda has been frequently collaborating to expand its business. For instance, the company’s joint venture with GAC Group and Dongfeng Motor Group will drive its EV prospects in China. Partnership with CATL, collaboration with BMW and Ford to establish ChargeScape, alliance with SCSK Corp and recent memorandum of understanding (MoU) with Mitsubishi bode well.
Honda’s partnership with General Motors to develop affordable EVs will further drive growth. Its plan to launch more than 10 electric motorcycle models globally by 2025 and 3.5 million units by 2030 is praiseworthy. In August, Honda launched its first personal-use electric motorcycle in Japan, EM1 e. Demonstrating innovation, Honda showcased the SC e: Concept motorcycle at the Japan Mobility Show 2023.
As part of the global restructuring move, Honda has been taking steps to control costs and optimize production capacity. Honda will be able to lower fixed costs and vehicle production expenses, thereby generating savings that can be directed toward more profitable opportunities and rev up profits. Cost-containment efforts are boosting the firm's financials. Honda has a manageable total debt-to-capital ratio of 0.29.
Upbeat projections for fiscal 2024 spark optimism. Honda projects sales volumes from Motorcycle and Automobile segments to be 18.8 million units and 4.10 million units, respectively, in fiscal 2024 compared with fiscal 2023 levels of 18.75 million units and 3.68 million units, respectively. For fiscal 2024, Honda forecasts revenues of ¥20 trillion, indicating an uptick of 18.3% year over year. Operating profit is envisioned at ¥1.2 trillion, implying growth of 53.7% year over year. Pretax profit is forecast at ¥.39 trillion, suggesting an increase of 58.6% year over year.
Concerns
High R&D expenses on advanced technologies and alternative fuels for the development of electric and autonomous vehicles bode well for the future. However, the same is also likely to limit the near-term margins and cash flows of the company. Although Honda’s fiscal 2024 sales volume forecast for the Motorcycle and Automotive segments indicates an uptick year over year, the company has trimmed projections for the Automotive unit due to the challenging environment in China.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 65.6%, respectively. The EPS estimates for 2023 and 2024 have increased by 28 cents and 13 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings indicates year-over-year growth of 6.5% and 55.9%, respectively. The EPS estimates for 2023 and 2024 have increased by 16 cents and 9 cents, respectively, in the past 30 days.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why You Should Retain Honda Motor (HMC) Stock Now
Honda (HMC - Free Report) is a leading manufacturer of automobiles and the largest producer of motorcycles in the world. The automaker is poised to benefit from its expanding lineup of electric vehicles, frequent collaborations to expand the business and cost-containment efforts. However, high R&D expenses on advanced technologies and alternative fuels remain a concern.
The Zacks Consensus Estimate for Honda’s 2024 earnings per share is pegged at $3.91, implying a rise of 29% from the year-ago reported number.
Let us discuss the factors that highlight why investors should retain the stock.
Growth Indicators
Honda’s 2030 Vision, which emphasizes electrified mobility products, bodes well. Its sharp focus on providing attractive products with an expanding lineup of electric vehicles (“EVs”) in light of changing circumstances in the automobile industry is likely to boost prospects. Japan’s auto giant targets EVs to account for 20% of sales in Japan and 40% of sales in North America and China by the decade’s end. Honda plans to launch Acura ZDX and Honda Prologue in North America by early 2024. It also plans to introduce 10 models in the next five years underits e:N series.
Honda has been frequently collaborating to expand its business. For instance, the company’s joint venture with GAC Group and Dongfeng Motor Group will drive its EV prospects in China. Partnership with CATL, collaboration with BMW and Ford to establish ChargeScape, alliance with SCSK Corp and recent memorandum of understanding (MoU) with Mitsubishi bode well.
Honda’s partnership with General Motors to develop affordable EVs will further drive growth. Its plan to launch more than 10 electric motorcycle models globally by 2025 and 3.5 million units by 2030 is praiseworthy. In August, Honda launched its first personal-use electric motorcycle in Japan, EM1 e. Demonstrating innovation, Honda showcased the SC e: Concept motorcycle at the Japan Mobility Show 2023.
As part of the global restructuring move, Honda has been taking steps to control costs and optimize production capacity. Honda will be able to lower fixed costs and vehicle production expenses, thereby generating savings that can be directed toward more profitable opportunities and rev up profits. Cost-containment efforts are boosting the firm's financials. Honda has a manageable total debt-to-capital ratio of 0.29.
Upbeat projections for fiscal 2024 spark optimism. Honda projects sales volumes from Motorcycle and Automobile segments to be 18.8 million units and 4.10 million units, respectively, in fiscal 2024 compared with fiscal 2023 levels of 18.75 million units and 3.68 million units, respectively. For fiscal 2024, Honda forecasts revenues of ¥20 trillion, indicating an uptick of 18.3% year over year. Operating profit is envisioned at ¥1.2 trillion, implying growth of 53.7% year over year. Pretax profit is forecast at ¥.39 trillion, suggesting an increase of 58.6% year over year.
Concerns
High R&D expenses on advanced technologies and alternative fuels for the development of electric and autonomous vehicles bode well for the future. However, the same is also likely to limit the near-term margins and cash flows of the company. Although Honda’s fiscal 2024 sales volume forecast for the Motorcycle and Automotive segments indicates an uptick year over year, the company has trimmed projections for the Automotive unit due to the challenging environment in China.
Key Picks
Some top-ranked players in the auto space are Volvo (VLVLY - Free Report) and Modine Manufacturing Company (MOD - Free Report) , each sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 65.6%, respectively. The EPS estimates for 2023 and 2024 have increased by 28 cents and 13 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for MOD’s 2023 sales and earnings indicates year-over-year growth of 6.5% and 55.9%, respectively. The EPS estimates for 2023 and 2024 have increased by 16 cents and 9 cents, respectively, in the past 30 days.