Why Analysts’ Targets for Honda Rose in January 2018



Ratings on Honda

According to analysts’ consensus data, about 43% of analysts covering Honda Motor Company (HMC) gave it a “buy” recommendation on January 19. The remaining 57% of these analysts suggested a “hold.” There were no “sell” recommendations for Honda stock.

These recommendations are based on 23 analysts’ consensus data compiled by Thomson Reuters.

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Price targets moved up

On January 19, analysts’ 12-month consensus target price for Honda’s ADR (American Depository Receipt) was $39.16. This consensus target price has significantly risen in the last month from $36.92.

On the NYSE, the January consensus target suggested a positive return potential of ~8.1% from its market price of $36.24.

Honda Motor Company is not directly listed on any stock exchange in the US market, like its Japanese peer Toyota (TM), but the ADRs of both companies are traded on the NYSE.

Recent developments

In 2017, Honda reported positive growth in its US sales for the sixth consecutive year. In December 2017, Honda’s US truck sales rose 1.4% YoY (year-over-year) while its car sales fell 16.5%. The company’s US vehicle sales rose 0.2% in 2017 YoY.

In its fiscal 2Q18 ended September 2017, Honda reported a 16.0% YoY increase in its global revenues. In contrast, its operating profit shrank due to costs related to an extensive vehicle recall to fix faulty Takata airbags in Honda vehicles. The faulty airbags from Japanese manufacturer Takata Corporation affected other automakers (IYK) including Fiat Chrysler (FCAU), Toyota, and Ford (F).

After the 2Q18 earnings report, analysts’ ratings on Honda reflected optimism, mostly due to its continued global revenues growth and increased US truck sales. This could also explain why we saw a recent upward revision in analysts’ price targets on HMC.

Continue to the next part to learn what analysts are recommending for Ferrari in January 2018.


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