Market Overview

Auto Pair Trade: Goldman Sachs Buys Toyota, Steps To Sidelines On Honda

Auto Pair Trade: Goldman Sachs Buys Toyota, Steps To Sidelines On Honda

Honda Motor Co Ltd (ADR) (NYSE: HMC) reported strong May sales, while Toyota Motor Corp (ADR) (NYSE: TM) faded, but one analyst expects their fortunes to reverse soon. 

The Ratings

Goldman Sachs analyst Kota Yuzawa downgraded Honda to Neutral and cut the price target denoted in Japanese yen.

Yuzawa upgrade Toyota to Buy and increased the price target target.

The Thesis 

By Yuzawa’s estimate, revenue growth is unlikely considering rising competition in the U.S. — Toyota’s key region — where sales volume and market share have waned.

The automaker's commitment to cutting cost of goods sold could drive profits, the analyst said. 

“We expect Toyota to establish a leaner earnings structure over the next few years, with benefits not only from the increased use of common platforms under Toyota New Global Architecture, but also from CoGS improvement initiatives that extend to affiliated parts makers and an overhaul of other costs, particularly on the office side of the business." 

The same U.S. sales environment challenging Toyota is seen to stunt Honda and prompt an increase in sedan incentives. Yuzawa expects Honda operating profits to miss consensus.

Nonetheless, the firm could be buoyed by its motorcycle business generating 30 percent of earnings, the analyst said. 

Price Action

Toyota shares were up 2.52 percent at the time of publication Monday and Honda was up 0.44 percent. 

Related Links:

Study: Tesla The Most Trusted Company In Autonomous Development Race, Despite Crash Investigations

Fatalities Will Decline With Autonomous Vehicles, Gene Munster Says After Uber Incident

Latest Ratings for HMC

Oct 2019DowngradesBuyOutperform
Jun 2018DowngradesBuyNeutral
Aug 2017UpgradesReduceNeutral

View More Analyst Ratings for HMC
View the Latest Analyst Ratings

Posted-In: Goldman Sachs Kota YuzawaAnalyst Color Upgrades Downgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (HMC + TM)

View Comments and Join the Discussion!

Latest Ratings

RMTIPiper JaffrayMaintains6.0
KPiper JaffrayMaintains74.0
BREWMaxim GroupDowngrades16.5
FFWMPiper JaffrayMaintains18.0
APYXPiper JaffrayMaintains10.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

A Report Card On AMD EPYC Processors From Baird

35 Stocks Moving In Monday's Mid-Day Session