June 1, 2023
Top 10 Stock Honda Motor Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Honda Motor – Top 10 Stock in Tokyo Stock Exchange TOPIX 100
Honda Motor is listed as a top 10 stock on June 01, 2023 in the market index TOPIX 100 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 71 (high 71% performer), Obermatt assesses an overall buy recommendation for Honda Motor on June 01, 2023.
Snapshot: Obermatt Ranks
| Country | Japan |
| Industry | Automobile Manufacturers |
| Index | TOPIX 100, Nikkei 225 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment Honda Motor Buy
| 360 METRICS | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 58 |
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| SENTIMENT | ||||||||
| SENTIMENT | 40 |
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| 360° VIEW | ||||||||
| 360° VIEW | 71 |
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ANALYSIS: With an Obermatt 360° View of 71 (better than 71% compared with alternatives), overall professional sentiment and engagement for the stock Honda Motor are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Honda Motor. The consolidated Value Rank has an attractive rank of 93, which means that the share price of Honda Motor is on the lower side compared with typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 93% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 58. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 40. Professional investors are more confident in 60% other stocks. The consolidated Growth Rank also has a low rank of 41, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 59 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 71, Honda Motor is better than 71% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 93), and the financing structure is on the safer side (Safety Rank of 58). However, sentiment in the professional investor community is below-average (Sentiment Rank of 40), as is the growth momentum for the company (Growth Rank of 41). While everybody wants to buy at low stock prices (good value), professionals’ skepticism may mean that the low price is justified. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Honda Motor only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 40 (better than 40% compared with alternatives), overall professional sentiment and engagement for the stock Honda Motor is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Honda Motor. Analyst Opinions are at a rank of 50 (better than 50% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 55, which means that stock research experts are changing their opinions for the better in recommending investing in the company. In other words, they are getting even more optimistic about investments in Honda Motor. Finally, the Professional Investors rank is 67, which means that currently, professional investors hold more stock in this company than in 67% of alternative investment opportunities. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 40 (less encouraging than 60% compared with investment alternatives), Honda Motor has a reputation among professional investors that is below that of its competitors. Pros tend to favor investing in this company. But there is also a signal for caution. Market Pulse has a rank of 5, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 95% of competitors). This could mean future risks and should make investors careful. Attention to negative news for Honda Motor is worthwhile because they may be early warning signals. Without those, all other professional signals are encouraging, especially since analysts are getting more optimistic. ...read more
Value Strategy: Honda Motor Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 93 (better than 93% compared with alternatives) for 2023, Honda Motor shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Honda Motor. Price-to-Sales has a value of 75 which means that the stock price compared with what market professionals expect for future sales is lower than for 75% of comparable companies, indicating a good value for Honda Motor's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 84% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 95. Compared with other companies in the same industry, dividend yields of Honda Motor are expected to be higher than for 77% of all competitors (a Dividend Yield rank of 77). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 93, is a strong buy recommendation based on Honda Motor's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Honda Motor based on its detailed value metrics.
Growth Strategy: Honda Motor Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 41 (better than 41% compared with alternatives), Honda Motor shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Honda Motor. Capital Growth has a rank of 64, which means that currently professionals expect the company to grow its invested capital more than 41% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 65 (above 65% of alternative investments). But Sales Growth has only a rank of 27, which means that, currently, professionals expect the company to grow less than 73% of its competitors, and Profit Growth is also low at a rank of 41. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a HOLD recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Honda Motor, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Honda Motor Debt Financing Safety above-average
| SAFETY METRICS | June 1, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 34 |
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| REFINANCING | ||||||||
| REFINANCING | 59 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 64 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 58 |
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ANALYSIS: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), the company Honda Motor has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Honda Motor is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Honda Motor. Refinancing is at 59, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Liquidity is also good at 64, meaning the company generates more profit to service its debt than 64% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 34, which means the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 58 (better than 58% compared with alternatives), Honda Motor has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Honda Motor could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Honda Motor Top Financial Performance
| COMBINED PERFORMANCE | June 1, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 93 |
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| GROWTH | ||||||||
| GROWTH | 41 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Honda Motor (Automobile Manufacturers, Japan) shares have much better financial characteristics than comparable stocks. Shares of Honda Motor are a good value (attractively priced) with a consolidated Obermatt Value Rank of 93 (better than 93% of alternatives), are safely financed (Safety Rank of 58, which means low debt burdens), but show below-average growth (Growth Rank of 41). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 86, is a strong buy recommendation based on Honda Motor's financial characteristics. As the company Honda Motor's key financial metrics exhibit good value (Obermatt Value Rank of 93) but low growth (Obermatt Growth Rank of 41) while being safely financed (Obermatt Safety Rank of 58), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 93% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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