On Oct 17, 2013, Zacks Investment Research maintained the
Neutral recommendation on
Honda Motor Co., Ltd.
Why the Reiteration?
Honda has been increasingly focusing on infrastructural
developments. The company's collaboration with
General Motors Company
) is noteworthy as the entities aim to develop next-generation
fuel cell vehicles by 2020 in order to conform to the fuel
economy standard in the U.S.
Honda also recently announced investments in Ohio and Brazil
to expand its plants and boost manufacturing capacity. Moreover,
in the Automobile business, Honda is focusing on introducing new
products for local markets, enhancing its global network and
expanding its business in Asia.
Honda expects revenues to increase 22.5% to ¥12,100 billion in
fiscal 2014. Operating profit is expected to surge 43.2% to ¥780
billion and net income is anticipated to rise 58% to ¥580 billion
or ¥321.81 per share. The company expects higher revenues,
favorable model mix and effective cost reduction measures to
boost profits during the year.
However, on the negative side, Honda's first-quarter fiscal
2014 (ended Jun 30, 2013) earnings per share dropped 7% to ¥67.97
($0.69) from ¥73.09 in the corresponding period last year. Net
income stood at ¥122.4 billion ($1,243 million), down from ¥131.7
billion in the year-ago quarter.
Further, we are concerned about Honda's increasing SG&A
and R&D expenses and declining cash balance. Frequent product
recalls are also unfavorable.
Other Stocks to Consider
Honda currently carries a Zacks Rank #2 (Buy). In the same
Fuji Heavy Industries Ltd.
) are worth a look at the moment. While Daimler carries a Zacks
Rank #1 (Strong Buy), Fuji carries a Zacks Rank #2 (Buy).
DAIMLER AG (DDAIF): Get Free Report
FUJI HEAVY ADR (FUJHY): Get Free Report
GENERAL MOTORS (GM): Free Stock Analysis
HONDA MOTOR (HMC): Free Stock Analysis Report
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