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Honda Motor (HMC) Gains As Market Dips: What You Should Know

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Honda Motor (HMC - Free Report) ended the recent trading session at $32.49, demonstrating a +0.71% swing from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily loss of 0.07%. Elsewhere, the Dow gained 0.16%, while the tech-heavy Nasdaq lost 0.36%.

Prior to today's trading, shares of the automaker had gained 5.25% over the past month. This has outpaced the Auto-Tires-Trucks sector's loss of 12.12% and the S&P 500's gain of 3.05% in that time.

The investment community will be paying close attention to the earnings performance of Honda Motor in its upcoming release. The company is expected to report EPS of $0.85, down 16.67% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $37.68 billion, up 19.76% from the year-ago period.

For the full year, the Zacks Consensus Estimates are projecting earnings of $4.16 per share and revenue of $143.49 billion, which would represent changes of +37.29% and +14.79%, respectively, from the prior year.

Investors should also pay attention to any latest changes in analyst estimates for Honda Motor. Recent revisions tend to reflect the latest near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 6.23% increase. Honda Motor is holding a Zacks Rank of #1 (Strong Buy) right now.

Investors should also note Honda Motor's current valuation metrics, including its Forward P/E ratio of 7.75. For comparison, its industry has an average Forward P/E of 6.97, which means Honda Motor is trading at a premium to the group.

Meanwhile, HMC's PEG ratio is currently 0.37. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Automotive - Foreign was holding an average PEG ratio of 0.35 at yesterday's closing price.

The Automotive - Foreign industry is part of the Auto-Tires-Trucks sector. With its current Zacks Industry Rank of 57, this industry ranks in the top 23% of all industries, numbering over 250.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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