In a report released today, Kentaro Hosoda from Bank of America Securities maintained a Buy rating on Honda Motor Co (HNDAF – Research Report), with a price target of Yen2,000.00.
Kentaro Hosoda’s rating is based on several key factors that suggest a positive outlook for Honda Motor Co. Despite a decline in profits primarily due to one-off factors such as warranty costs and foreign exchange issues, Hosoda sees the market’s reaction as exaggerated. The company is taking measures to address these issues, including possibly claiming damages from suppliers and maintaining its operational profit guidance for the fiscal year.
Additionally, Honda has announced a significant share buyback program, which reflects a commitment to improving capital efficiency and providing shareholder returns. While challenges exist, particularly in the Chinese market, Honda is proactively managing these with potential fixed-cost reductions. These strategic moves, along with the company’s strong financial position, support the Buy rating as they are likely to enhance investment appeal and shareholder value.
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Honda Motor Co (HNDAF) Company Description:
Honda Motor Co., Ltd. engages in the manufacture and sale of automobiles, motorcycles, and power products. It operates through the following segments: Automobile, Motorcycle, Financial Services, and Power Product and Other Businesses. The Automobile segment manufactures and sells automobiles and related accessories. The Motorcycle segment handles all-terrain vehicles, motorcycle business, and related parts. The Financial Services segment provides financial and insurance services. The Power Product and Other Businesses segment offers power products and relevant parts. The company was founded by Soichiro Honda on September 24, 1948 and is headquartered in Tokyo, Japan.
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