Japanese auto stocks Q1 earnings preview: Honda, Suzuki, Toyota Tsusho performance may exceed expectations (Bernstein)
Bernstein previewed the Q1 (April-June) performance of the Japanese automobile and parts sector FY3/27, predicting that Honda, Suzuki and Toyota Tsusho will deliver strong results.
Bernstein previewed the Q1 (April-June) performance of the Japanese automobile and parts sector FY3/27, predicting that Honda, Suzuki and Toyota Tsusho will deliver strong results. The core drivers were foreign exchange gains from a weaker yen, as well as strong sales and improved product mix across companies. In contrast, Nissan is expected to perform weaker. The market's overall profit expectations for Japanese auto stocks may be too conservative, especially ignoring the excessive amplification effect of the depreciation of the yen on the profits of export-oriented auto companies. Companies such as Honda and Suzuki may have profit surprises. One-sentence conclusion: Benefiting from the depreciation of the yen and strong sales, Honda, Suzuki and Toyota Tsusho's current quarter financial reports are expected to exceed market expectations and are the most noteworthy targets in the Japanese automobile sector. Positive/negative: Positive for Honda (7267.T), Suzuki (7269.T), and Toyota Tsusho (8015.T). These companies will benefit most from a weaker yen and strong sales, and the market may be underestimating their earnings resilience. Catalysts: 1) Companies release Q1 financial reports from the end of July to early August; 2) The trend of the US dollar/yen exchange rate directly affects profit forecasts.