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Don't Overlook These 3 Japanese Auto Stocks: DNZOY, SZKMY and YAMF
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 Corp., 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 and China Yochai International .
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.
Automobile & Motorcycle Leaders: Suzuki & Yamaha
As iconic motorcycle manufacturers, Suzuki Motor and Yamaha Motor’s 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.
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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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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Zacks Investment Ideas feature highlights: Denso, Strattec Security, China Yochai, Suzuki and Yamaha
For Immediate Release
Chicago, IL – October 10, 2024 – Today, Zacks Investment Ideas feature highlights Denso Corp. (DNZOY - Free Report) , Strattec Security (STRT - Free Report) , China Yochai International (CYD - Free Report) , Suzuki Motor (SZKMY - Free Report) and Yamaha Motor’s (YAMHF - Free Report) .
Don't Overlook These 3 Japanese Auto Stocks: DNZOY, SZKMY and YAMF
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 Corp., 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 and China Yochai International .
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.
Automobile & Motorcycle Leaders: Suzuki & Yamaha
As iconic motorcycle manufacturers, Suzuki Motor and Yamaha Motor’s 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.
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.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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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.