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Why No Analyst Thinks You Should ‘Sell’ Honda Stock This Xmas

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Dec. 4 2020, Updated 10:53 a.m. ET

No “sell” recommendations for Honda

According to the analysts’ consensus data, ~43% of the analysts covering Honda Motor (HMC) stock recommend a “buy” as of December 12, while 57% recommend a “hold.” No analyst currently recommends a “sell.”

These recommendations are based on the data from the 23 analysts compiled by Thomson Reuters.

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Honda’s next 12 months: what to expect?

On December 12, the analysts’ 12-month consensus target price for Honda’s ADR (American depository receipt) was $36.92. This consensus target price has risen a lot in the past couple of months—up from $32.20 previously.

On the NYSE (New York Stock Exchange), the November consensus target suggested a positive return potential of ~10.1% from its market price of $33.52. Similar to its Japanese peer, Toyota Motor (TM), Honda isn’t directly listed on any stock exchange in the US market—only its ADRs are traded on the NYSE.

Recent fundamentals

In November 2017, Honda’s US truck sales rose 14.9% YoY (year-over-year), while its car sales rose 1.4%. Its US vehicle sales rose 1.0% YoY in the first 11 months of 2017.

In its fiscal 2Q18 (ended September 2017), Honda reported a 16% YoY rise in its global revenues, but its operating profit shrank on costs related to extensive vehicle recalls to fix the faulty Takata airbags in many Honda vehicles. Notably, faulty airbags from Japanese manufacturer Takata also affected automakers (IYK) Fiat Chrysler Automobiles (FCAU), Ford Motor (F), and Toyota.

Still, after Honda’s fiscal 2Q18 earnings report, the analysts’ ratings for Honda reflected optimism, likely due to its continued global revenue growth and the increase in its US truck sales. This could be the key reason that no analysts covering Honda stock are recommending a “sell.”

Now let’s move to Ferrari.

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