Honda Motor Company
In the previous part of this series, we looked at Honda Motor’s (HMC) recent financial results. Despite a drop in its fiscal 2017 revenues, the company managed to report positive growth in its profit margins. Now let’s move on by looking at Wall Street analysts’ estimates for Honda’s upcoming earnings results.
Honda’s 1Q18 earnings estimates
Analysts estimate that Honda will post adjusted EPS (earnings per share) of 92.5 Japanese yen, or $0.83, in fiscal 1Q18. This would be about 4.5% lower than the company’s EPS of 96.9 Japanese yen reported in 1Q17.
Analysts expect Honda’s global revenues to improve marginally by about 1.5% on a YoY (year-over-year) basis for the quarter. Just like in the case of Toyota, analysts’ estimates suggest that Honda’s profit margins could also suffer in the coming quarters. According to the estimates, the company’s net profit margins in 1Q18 could fall to 4.8% from 5.0% in 1Q17.
Honda Motor is the second-largest Japanese automaker after Toyota (TM) by vehicle sales volume. In the US market, Honda competes with mainstream automakers (IYK) including Ford (F), General Motors (GM), and Fiat Chrysler (FCAU).
Key technical levels
On June 27, Honda’s ADR (American depositary receipt) was at $27.24, its lowest level since August 2016. An immediate support level is near the $26.50 price level followed by its 52-week low near $24.04, which could act as a key support level. Its 14-day relative strength index, a momentum indicator, is at 39.7, suggesting weakness in the momentum.
Currently, the stock is trading well below its 50-day moving average, which is at $28.19. We can expect its 50-day simple moving average to act as an immediate resistance for Honda’s ADR.
In the next part, we’ll learn about Wall Street analysts’ recommendations for Honda before 2Q17 ends.