honda motor company n.
Skip this Video
Loading SlideShow in 5 Seconds..
Honda Motor Company PowerPoint Presentation
Download Presentation
Honda Motor Company

Loading in 2 Seconds...

play fullscreen
1 / 25

Honda Motor Company - PowerPoint PPT Presentation

  • Uploaded on

Honda Motor Company. Presented By: Zach Bodine March 9, 2006. Price 52-Week High 52-Week Low Average Volume (3 months) Market Capitalization. $29.54 $30.36 $23.75 539,598 $55.55 Bil. Stock Fundamentals. Investment Recommendation. Buy/Hold. Ratios (all per share) P/E Ratio

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about 'Honda Motor Company' - JasminFlorian

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
honda motor company

Honda Motor Company

Presented By: Zach Bodine

March 9, 2006

stock fundamentals

52-Week High

52-Week Low

Average Volume (3 months)

Market Capitalization





$55.55 Bil

Stock Fundamentals
key ratios
Ratios (all per share)

P/E Ratio


Dividend and Yield

Financial Strength Ratios



Long-Term D/E

Total Debt to Equity

Return on Equity (per share)

Return on Assets



0.34 (1.10%)






Key Ratios
growth percentages
Over the past 5 Years


Dividend Per Share

Earnings Per Share

Operating Income





Growth Percentages
company description
Company Description

Automotive Manufacturers – Major

  • Automobiles
  • Motorcycles
  • Power Products
  • Financial Services
  • Honda is the World’s Largest motorcycle manufacturer but is most known for its automotive industry
global position
Global Position

Over 9 month span

Honda generated 59% of its automobile profit from the North America alone, which was an increase of 2.5% from a year ago.

However, Asia led in Motorcycle sales with 27.5%, while N.A. had 25.5%. This was opposite of a year ago.

Sales for the last 9 months ended Dec 30, 2005 totaled $60.9B, and Sales for all of 2005 totaled $80.5B.

honda s automobile brands
Honda’s Automobile Brands

Honda’s principal automobile products include passenger cars under:

Legend, Accord, Civic,

City, Fit Saloon, Acura RL, Acura TL, and Acura TSX brands

Multiwagons, Minivans, Sport utility vehicle, and Sports coupe under:

Elysion, Odyssey, Step Wagon, Edix, FR-V, Stream, Fit, Jazz, Pilot, Element, CR-V, Acura MDX, and Acura RSX brands

consumer reports top automobile picks for 2006
Consumer Reports Top Automobile picks for2006
  • Top Small Sedan (less than $20gs)
  • Top Family Sedan ($20-$30gs)
  • Top Upscale Sedan ($30-40gs)
  • Luxury Sedan
  • SUV ($30gs and more)
  • Small SUV (less than $30gs)
  • Top Minivan
  • Top Pick-up Truck
  • Green Car
  • Fun to drive

Honda Civic

Honda Accord

Acura TL (Honda)

Infiniti M35 (Nissan)

Toyota Highlander Hybrid

Subaru Forester

Honda Odyssey

Honda Ridgeline

Toyota Prius

Subaru Imprezza

  • Additionally, Honda was 2nd overall in vehicle reliability right behind Lexus
marketing technology
  • The new ACE System (Advanced Compatibility Engineering)
  • 5 star rating
  • Hybrid Engines
  • Jet Engines Manufacturing
  • Nattokinase
research and development
Research and Development
  • Honda currently has individualized R&D facilities in Japan for motorcycles, automobiles, and power products, and a motorcycle R&D center in China for its increasing market demand.
  • HRI (the Honda Research Institute) is located in Japan, U.S., and Germany.

- Research focus on: robotics technology, automotive safety, ultra lightweight products, and fuel cell technology

- Deriving automotive fuel from plants.

  • Honda also has networked facilities in the UK, Germany and Italy (to help focus on the European market more independently)
management structure
Management Structure
  • President and Representative Director

Takeo Fukui

Age: 62

  • Executive Vice-President and Representative Director

Satoshi Aoki

Age: 60

  • Promotion of Objective Management:

Staff composed of 22 personnel. Two director positions and one auditor assigned annually outside the company.

Temporary directors are paid according to how well the Company performs during their tenor.

  • New Jersey Supreme Court: Honda sued for engine failure by a leasee.
    • Magnussen Warranty Act
    • Engine failure occurred @ 22,000 miles
    • Losing company must cover all legal fees
    • AAM supports Honda
  • Clean- Fuel tax deduction (2005)
  • Tax breaks under new energy bill (2006)
industry trends
Industry Trends
  • Trend of Companies performing well in foreign markets, but not domestically.
  • GM: Dealing with Health care problems ($100B annually)
    • Sold GMAC Subsid.
    • Possibility of bankruptcy in the future
  • Ford: $1.6B decline in car sales from years ending 04’ – 05’
    • Sold Hertz rentl car business
  • Chrysler: Changes management around
    • Only U.S. manufacturer not in the red
  • Volkswagen: high prices, low quality, plus labor force issues
  • Toyota and Honda are prospering well in U.S. market
  • Everyone looks to China for expansion
valuation data for return on equity
Valuation Data For Return on Equity

Beta = .46

Risk Free Rate = .486

Avg. Market Risk = 11%

Re = Rf + B(Equity Risk Premium)

Re = .0486+.46(.11-.0486) =7.68%

valuation of stock price
Valuation of Stock Price
  • Intrinsic Value based on Future Cash Flows
  • Conservative Growth rate

Normal Growth

Re= 7.68%

Owner earnings= $3.14B

Growth rate = 4%

Second Stage Growth rate = 2.5%

Estimated Intrinsic Value= $39.11

valuation continued
Valuation continued

Diminishing Growth

  • Using revenue growth of 14.3% from 2003-2004, and 6% from 2004-2005, you could project that revenue growth from 2005-2006 could be equal to:
  • 6/14.3=.4196
  • .4196*6= 2.52% (new assumed growth rate)
  • Leaving all other variables the same
  • Estimated Intrinsic Value = $34.84
valuation continued1
Valuation continued…..
  • Impressive growth
  • By Viewing the table which displays sales in yen over the 9 months ended 12/31/2004, and then looking at the sales in yen for the 9 months ended 12/31/2005 you get the following numbers
  • 2004 sales = 6300551
  • 2005 sales =7074255
  • Growth rate= 7074255/6300551= 12.2%
  • Adjusted to 10%
  • Estimated Intrinsic Value = $62.50
pros and cons
Pros and Cons
  • Pros:
  • Fuel/ cost efficient products and technology
  • Extensive R&D programs
  • Superior Technology
  • Moving towards differentiated product lines
  • One of the few currently profiting companies in its industry
  • Objective Management Structure
  • Continuous increase in automotive sales in North America, particularly U.S., and in Europe as well.
  • Cons:
  • Fluctuation of Exchange rates, makes for inconsistent earnings
  • Japan’s Economy
  • Automotive industry very susceptible to interest rates
  • Toyota may be a better buy