This trade activity should not be overlooked: Honda Motor Co. Ltd. (HMC)

Honda Motor Co. Ltd. (NYSE: HMC) stock fell -2.42% on Friday to $23.80 against a previous-day closing price of $24.39. With 1.16 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.12 million shares. During the session, the Auto Manufacturers company that operates in wider Consumer Cyclical sector, reached to the highest price of $24.28 whereas the lowest price it dropped to was $23.80. The 52-week range on HMC shows that it touched its highest point at $32.15 and its lowest point at $23.21 during that stretch. It currently has a 1-year price target of $30.08. With its current market cap of 43.85 billion, HMC has annualized dividend of $0.99 while the current yield stands at 4.15%. Beta for the stock currently stands at 0.68.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of HMC was down-trending over the past week, with a drop of -4.95%, but this was down by -10.73% over a month. Three-month performance dropped to -5.29% while six-month performance fell -16.52%. The stock lost -22.09% in the past year, while it has lost -16.34% so far this year. EPS is expected to grow by 13.20% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 3.70%.

Float and Shares Shorts:

At present, 1.71 billion HMC shares are outstanding with a float of 1.71 billion shares on hand for trading. On Aug 30, 2022, short shares totaled 1.72 million, which was 0.10% higher than short shares on Jul 28, 2022. In addition to Mr. Toshihiro Mibe as the firm’s Pres, CEO, Representative Exec. Officer & Director, Mr. Kohei Takeuchi serves as its CFO, Compliance Officer, Director, Exec. VP & Representative Exec. Officer.

Institutional Ownership:

Through their ownership of 5.29% of HMC’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 2.52% of HMC, in contrast to 2.37% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in HMC with 2.51% of the stake, Dodge & Cox holds 45,524,270 shares worth 45,524,270. A second-largest stockholder of HMC, Fisher Asset Management LLC, holds 8,819,500 shares, controlling over 0.49% of the firm’s shares. Mondrian Investment Partners Ltd. is the third largest shareholder in HMC, holding 2,410,969 shares or 0.13% stake. With a 1.78% stake in HMC, the Dodge & Cox Stock Fund is the largest stakeholder. A total of 32,320,800 shares are owned by the mutual fund manager. The Dodge & Cox Balanced Fund, which owns about 0.34% of HMC stock, is the second-largest Mutual Fund holder. It holds 6,077,600 shares valued at 161.18 million. Dodge & Cox Worldwide Funds – US holds 0.05% of the stake in HMC, owning 846,400 shares worth 22.45 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2022, HMC reported revenue of $3.83T and operating income of $222.22B. Over the past year, revenue came in at $14.80T while operating income stood at $850.24B. It generated $149.22B net income for the quarter, which came to $633.77B over the last twelve months. The EBITDA in the recently reported quarter was $406.26B and diluted EPS was $87.23. EBITDA for the full year was $1.64T.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for HMC since 21 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 9 believe that the stock is worth HOLDING, 4 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With HMC analysts setting a high price target of $37.78 and a low target of $23.59, the average target price over the next 12 months is $29.68. Based on these targets, HMC could surge 58.74% to reach the target high and fall by -0.88% to reach the target low. Reaching the average price target will result in a growth of 24.71% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. HMC will report FY 2023 earnings on 05/12/2023. Analysts have provided yearly estimates in a range of $3.59 being high and $2.94 being low. For HMC, this leads to a yearly average estimate of $3.21. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Honda Motor Co. Ltd. surprised analysts by -$0.18 when it reported $0.66 EPS against a consensus estimate of $0.84. The surprise factor in the prior quarter was $0.12. Based on analyst estimates, the high estimate for the next quarter is $1.15 and the low estimate is $0.72. The average estimate for the next quarter is thus $0.90.

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