Honda: More Analysts Recommend a ‘Buy’ in August

Analysts on Honda stock

According to analysts’ consensus data on August 28, 55.0% of the 20 analysts covering Honda Motor Company (HMC) gave it a “buy” recommendation. The remaining 45.0% if analysts surveyed by Thomson Reuters suggested a “hold.” There were no “sell” recommendations for the company.

Honda: More Analysts Recommend a ‘Buy’ in August

Return potential

Like Toyota, Honda isn’t directly listed on any stock exchange in the US market. However, the ADRs (American depositary receipts) of these companies are traded on the NYSE.

On August 28, analysts’ 12-month consensus target price for Honda ADR was $35.75 on the NYSE. Analysts’ consensus target for HMC suggested a positive return potential of ~17.3% from its market price of $30.48. This upside potential was much better than the ~9.5% upside potential of Toyota’s ADR, which we discussed in the previous part.

Analysts’ consensus target price on HMC had fallen significantly from ~$41.00 about four months ago. However, a higher percentage of analysts are suggesting a “buy” on Honda in August compared to July.

Key recent updates

Honda reported an 8.2% YoY (year-over-year) decline in its July US sales, including a 19.3% drop in its passenger car sales. On the brighter side, its Truck segment sales in the US market rose 3.2% YoY in July.

In the first seven months of 2018, Honda’s US sales volume has dropped by 1.7% YoY to 0.93 million units. During this period, its car sales have declined 6.8% while its truck sales have risen 3.2% YoY.

In Honda’s fiscal 2018,[1. fiscal 2018 ended March 31] its operating profits saw a negative impact of costs related to a massive vehicle recall to fix faulty Takata airbags. Faulty airbags from Japanese manufacturer Takata Corporation affected other automakers (VCR) such as Fiat Chrysler (FCAU), Toyota, and Ford (F).

Read on to the next part to learn what analysts are recommending for Ferrari in August.