The analyst argues that Honda is an 'unloved stock' trading at a low valuation (6.5x EV/EBITDA, 10% free cash flow yield) with a strong balance sheet (2.6x debt/EBITDA) and aggressive share buybacks. While historical revenue and earnings growth have been flat, the company's forecast for 20% operating profit growth in 2024, if achieved, could lead to market multiple expansion and a 13% annual growth rate for investors over 10 years, even with minimal long-term growth.
“I think this is really a case of looking out forward the entire stock market is completely ignoring Honda and if it's yielding that much you've got time you're willing to wait might be an interesting flyer to take a look at especially if management can turn in the the the performance that they're expecting this year of 2020 this coming year of 2024”