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Honda Motor (HMC) Stock Drops Despite Market Gains: Important Facts to Note

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Honda Motor (HMC - Free Report) closed at $30.51 in the latest trading session, marking a -0.29% move from the prior day. The stock's change was less than the S&P 500's daily gain of 0.14%. Elsewhere, the Dow gained 0.3%, while the tech-heavy Nasdaq added 0.16%.

The automaker's stock has dropped by 1.07% in the past month, falling short of the Auto-Tires-Trucks sector's gain of 5.89% and the S&P 500's gain of 4.89%.

Investors will be eagerly watching for the performance of Honda Motor in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.78, reflecting a 23.53% decrease from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $37.68 billion, up 19.76% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $4 per share and a revenue of $143.49 billion, demonstrating changes of +32.01% and +14.79%, respectively, from the preceding year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Honda Motor. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Honda Motor is currently sporting a Zacks Rank of #3 (Hold).

With respect to valuation, Honda Motor is currently being traded at a Forward P/E ratio of 7.66. This indicates a premium in contrast to its industry's Forward P/E of 6.57.

We can additionally observe that HMC currently boasts a PEG ratio of 0.36. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The average PEG ratio for the Automotive - Foreign industry stood at 0.37 at the close of the market yesterday.

The Automotive - Foreign industry is part of the Auto-Tires-Trucks sector. At present, this industry carries a Zacks Industry Rank of 43, placing it within the top 18% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow HMC in the coming trading sessions, be sure to utilize Zacks.com.


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