A Hold recommendation has been issued to Honda Motor Company Limited (HMC), one of the largest automobile manufacturers in the world, by Zacks senior automobile sector analyst Paul Raman, CFA. Here are certain details from his report:
'Honda Motor Company is expanding its business in Asia, growing its global network to increase efficiency and introducing new products to satisfy local markets. Further, capacity expansion plans in Asia, a new sales strategy in Japan, and the proposed launch of Accura in Japan inspire optimism about Honda's future prospects.
'However, unfavorable currency exchange rates, flat-to-lower sales in its key markets (North America), and increased competition will threaten HMC's global competitive position. Therefore, we maintain our Hold rating with a six-month target price of $38.00. Currently, ADRs of Honda Motor Co. are trading at $36.70 which is 12.1x our 2008 EPADR estimate of $3.04.
'We believe the Honda stock has a further upside, given its technological leadership and global production capabilities, which enable it to continually provide its customers with cutting-edge products designed for their unique local needs. However, volatile crude prices and intensifying competition are some factors that may lower volumes. Thus, we rate HMC a Hold, with a six-month target price of $38.00. This is 13.2x our 2008 EPADR estimate.'
Read the full analyst report on HMC.
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