Why Honda Motor (HMC) Stock Is Down Today

NEW YORK (TheStreet) -- Shares of Honda Motor Co.   (HMC) are lower by -0.72% to $34.63 after the car company said its American Honda Motor Co. unit  sold 135,908 Honda and Acura vehicles in the U.S. in July, down 3.9% from the same month last year.

The Honda division reported sales of 123,428 units while Acura sold 12,480.

Auto industry analysts expected a 2% to 3% increase in July sales from July 213.

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TheStreet Ratings team rates HONDA MOTOR CO LTD as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HONDA MOTOR CO LTD (HMC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HONDA MOTOR CO LTD has improved earnings per share by 15.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, HONDA MOTOR CO LTD increased its bottom line by earning $3.10 versus $2.17 in the prior year. This year, the market expects an improvement in earnings ($3.62 versus $3.10).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Automobiles industry average. The net income increased by 17.1% when compared to the same quarter one year prior, going from $1,234.74 million to $1,446.49 million.
  • HMC's revenue growth trails the industry average of 19.7%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • In its most recent trading session, HMC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it is one of the factors that makes this stock an attractive investment.
  • You can view the full analysis from the report here: HMC Ratings Report

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