Honda Motor (HMC) shares rallied 9.5% in the last trading session to close at $27.62. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 12.9% loss over the past four weeks.

Honda stock surged yesterday amid a broader market rebound following Trump’s 90-day pause in reciprocal tariffs on most countries (except China). The move came in response to steep market declines and growing fears that tariff increases could push the economy into a recession.

This automaker is expected to post quarterly earnings of $0.72 per share in its upcoming report, which represents a year-over-year change of -27.3%. Revenues are expected to be $35.56 billion, down 2.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Honda, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HMC going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Honda is a member of the Zacks Automotive - Foreign industry. One other stock in the same industry, Toyota Motor Corporation (TM), finished the last trading session 9.3% higher at $174.14. TM has returned -13.7% over the past month.

For Toyota Motor , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $2.92. This represents a change of -41.5% from what the company reported a year ago. Toyota Motor currently has a Zacks Rank of #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Honda Motor Co., Ltd. (HMC):Free Stock Analysis Report

Toyota Motor Corporation (TM):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments