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Honda Motor (HMC) Gains But Lags Market: What You Should Know

Zacks.com logo Zacks.com 10/14/2021

Honda Motor (HMC) closed the most recent trading day at $30.26, moving +0.67% from the previous trading session. This change lagged the S&P 500's 1.71% gain on the day.

Coming into today, shares of the automaker had lost 3.53% in the past month. In that same time, the Auto-Tires-Trucks sector gained 1.22%, while the S&P 500 lost 2.25%.

Investors will be hoping for strength from HMC as it approaches its next earnings release. In that report, analysts expect HMC to post earnings of $0.77 per share. This would mark a year-over-year decline of 41.22%. Meanwhile, our latest consensus estimate is calling for revenue of $34.05 billion, down 1.04% from the prior-year quarter.

HMC's full-year Zacks Consensus Estimates are calling for earnings of $3.65 per share and revenue of $137.38 billion. These results would represent year-over-year changes of +1.67% and +10.37%, respectively.

Investors should also note any recent changes to analyst estimates for HMC. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 6.73% lower within the past month. HMC currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, HMC is holding a Forward P/E ratio of 8.24. This valuation marks a discount compared to its industry's average Forward P/E of 11.82.

We can also see that HMC currently has a PEG ratio of 0.57. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Automotive - Foreign stocks are, on average, holding a PEG ratio of 0.42 based on yesterday's closing prices.

The Automotive - Foreign industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 157, which puts it in the bottom 39% of all 250+ industries.

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

You can find more information on all of these metrics, and much more, on Zacks.com.

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