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Don't Overlook These 3 Japanese Auto Stocks: DNZOY, SZKMY, YAMHF
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Japan is starting to stand out among global auto markets as 3 Japanese auto manufacturers saw their stocks added to the Zacks Rank #1 (Strong Buy) list last week.
Seeing a positive trend of earnings estimate revisions here’s a further look at why now is a good time to buy these highly-ranked auto stocks.
Automotive Parts Leader: Denso
We'll start with Denso Corporation (DNZOY - Free Report) , a global manufacturer and supplier of automotive technology, systems, and auto parts.
Trading at $14, Denso’s stock is attractive in terms of valuation which has been magnified by the company’s intriguing growth trajectory. Notably, DNZOU trades at 11.4X forward earnings and at a nice discount to its Zacks Automotive-Original Equipment Industry average of 17.1X with a few standout peers being Milwaukee-based Strattec Security (STRT - Free Report) and China Yochai International (CYD - Free Report) .
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Reassuringly, Denso’s annual earnings are expected to soar 74% in its current fiscal 2025 to $1.27 per share compared to EPS of $0.73 in FY24. Even better, FY26 EPS is projected to pop another 16%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Denso’s top line expansion is also appealing as total sales are expected to rise over 3% in FY25 and FY26 with projections heading north of $50 billion.
Image Source: Zacks Investment Research
Automobile & Motorcycle Leaders: Suzuki & Yamaha
As iconic motorcycle manufacturers, Suzuki Motor (SZKMY - Free Report) and Yamaha Motor’s (YAMHF - Free Report) stock are certainly worthy of consideration at their current levels. Furthermore, Suzuki’s reach extends to automobile production with Yamaha being a renowned provider of automotive engines and transportation equipment.
With a current price tag of around $42 a share, Suzuki's stock trades near their Zacks Automotive-Foreign Industry average of 9X forward earnings with Yamaha shares trading at just 6.9X and under $10.
Most enticing is that Suzuki’s EPS is expected to spike 22% in its FY25 to $4.68 with Yamaha’s annual earnings projected to rise 8% this year to $1.27 per share. Better still, Suzuki and Yamaha are expecting 5% and 10% EPS growth in their next fiscal year respectively. This is also accompanied by steady single-digit top line expansion with Suzuki's total sales edging toward $40 billion and Yamaha expected to bring in over $19 billion next year.
Image Source: Zacks Investment Research
Bottom Line
Amid their improved outlook, these auto stocks appear to be undervalued especially when considering their importance to the global auto market and Japan. Now may be a great time to buy as earnings estimate revisions for Denso, Suzuki, and Yamaha’s stock are nicely up over the last 60 days suggesting more short-term upside.
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Don't Overlook These 3 Japanese Auto Stocks: DNZOY, SZKMY, YAMHF
Japan is starting to stand out among global auto markets as 3 Japanese auto manufacturers saw their stocks added to the Zacks Rank #1 (Strong Buy) list last week.
Seeing a positive trend of earnings estimate revisions here’s a further look at why now is a good time to buy these highly-ranked auto stocks.
Automotive Parts Leader: Denso
We'll start with Denso Corporation (DNZOY - Free Report) , a global manufacturer and supplier of automotive technology, systems, and auto parts.
Trading at $14, Denso’s stock is attractive in terms of valuation which has been magnified by the company’s intriguing growth trajectory. Notably, DNZOU trades at 11.4X forward earnings and at a nice discount to its Zacks Automotive-Original Equipment Industry average of 17.1X with a few standout peers being Milwaukee-based Strattec Security (STRT - Free Report) and China Yochai International (CYD - Free Report) .
Image Source: Zacks Investment Research
Reassuringly, Denso’s annual earnings are expected to soar 74% in its current fiscal 2025 to $1.27 per share compared to EPS of $0.73 in FY24. Even better, FY26 EPS is projected to pop another 16%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Denso’s top line expansion is also appealing as total sales are expected to rise over 3% in FY25 and FY26 with projections heading north of $50 billion.
Image Source: Zacks Investment Research
Automobile & Motorcycle Leaders: Suzuki & Yamaha
As iconic motorcycle manufacturers, Suzuki Motor (SZKMY - Free Report) and Yamaha Motor’s (YAMHF - Free Report) stock are certainly worthy of consideration at their current levels. Furthermore, Suzuki’s reach extends to automobile production with Yamaha being a renowned provider of automotive engines and transportation equipment.
With a current price tag of around $42 a share, Suzuki's stock trades near their Zacks Automotive-Foreign Industry average of 9X forward earnings with Yamaha shares trading at just 6.9X and under $10.
Most enticing is that Suzuki’s EPS is expected to spike 22% in its FY25 to $4.68 with Yamaha’s annual earnings projected to rise 8% this year to $1.27 per share. Better still, Suzuki and Yamaha are expecting 5% and 10% EPS growth in their next fiscal year respectively. This is also accompanied by steady single-digit top line expansion with Suzuki's total sales edging toward $40 billion and Yamaha expected to bring in over $19 billion next year.
Image Source: Zacks Investment Research
Bottom Line
Amid their improved outlook, these auto stocks appear to be undervalued especially when considering their importance to the global auto market and Japan. Now may be a great time to buy as earnings estimate revisions for Denso, Suzuki, and Yamaha’s stock are nicely up over the last 60 days suggesting more short-term upside.