Honda Motor Company’s (HMC) financial results are severely affected by a stronger Yen and the catastrophic disaster in Japan in March. Furthermore, recent floods in Thailand also damaged the company’s operations.
As a result, Honda could not provide guidance for the fiscal year ended March 31, 2012. And in the second quarter of fiscal 2012, Honda’s profits tumbled 55% to 60.4 billion Yen ($788 million) or 33.53 Yen ($0.44) per share on a year-over-year basis.
These factors have led us to downgrade our recommendation on shares of the company to Underperform with a target price of $27.
