Honda Motor Company (HMC) is expanding its business in Asia, growing its global network to increase efficiency and introducing new products to satisfy local markets. Furthermore, its capacity expansion across the world inspires optimism about Honda’s future prospects.
Despite unfavorable currency exchange rates and flat-to-lower sales in key markets such as North America and Europe, Honda reported an eye-popping 565.1% rise in profits to ?134.6 billion ($1.5 billion) for the third quarter of its fiscal 2010, driven by lower SG&A and R&D expenses and cost reduction efforts.
Furthermore, the company’s financial position has improved significantly. We, therefore, upgrade our recommendation on the stock from Neutral to Outperform with a target price of $42.Zacks Investment Research
