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

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Honda Motor (HMC - Free Report) closed the most recent trading day at $30.43, moving +0.63% from the previous trading session. This move lagged the S&P 500's daily gain of 1.09%.

Heading into today, shares of the automaker had lost 0.03% over the past month, lagging the Auto-Tires-Trucks sector's gain of 0.42% and the S&P 500's gain of 5.05% in that time.

Wall Street will be looking for positivity from HMC as it approaches its next earnings report date. In that report, analysts expect HMC to post earnings of $0.43 per share. This would mark year-over-year growth of 368.75%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $33.12 billion, up 4.31% from the year-ago period.

Any recent changes to analyst estimates for HMC should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 3.49% lower. HMC is currently a Zacks Rank #3 (Hold).

Looking at its valuation, HMC is holding a Forward P/E ratio of 8.41. This valuation marks a discount compared to its industry's average Forward P/E of 10.3.

We can also see that HMC currently has a PEG ratio of 0.36. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Automotive - Foreign industry currently had an average PEG ratio of 0.83 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 44, putting it in the top 18% 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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