Honda Shares Rise 11% Following U.S.-Japan Trade Agreement

Honda Motor Co. Ltd.'s (HMC) shares surged over 11% following a new U.S.-Japan trade deal that reduces U.S. auto tariffs on Japanese vehicles from 25% to 15%. Analysts predict a 23.76% upside potential for Honda's stock, and the company is rated as a "Buy" by brokerage firms. The GF Value for Honda in one year is estimated at $34.60, indicating a potential upside of 13.78% from its current price.

Honda Motor Co. Ltd. (HMC) shares surged over 11% on Wednesday following the announcement of a new U.S.-Japan trade deal that reduces U.S. auto tariffs on Japanese vehicles from 25% to 15%. The deal, brokered by U.S. President Donald Trump, is expected to ease sales in the U.S. and boost Honda's financial performance [1].

Analysts predict a 23.76% upside potential for Honda's stock, and the company is rated as a "Buy" by several brokerage firms. The GF Value for Honda in one year is estimated at $34.60, indicating a potential upside of 13.78% from its current price [2].

The trade deal, which includes a $550 billion commitment to Japanese investments in the U.S., has been well-received by the market. Retail conversations around Honda surged 400% on Stocktwits over the past 24 hours, driven by the trade deal, earnings reports, and partnerships [3].

However, the company's short interest has also risen, with 0.38% of all regular shares sold short. This increase in short interest could indicate that some traders are positioning for a potential downturn in the stock price [4].

Despite the short interest, the overall market sentiment towards Honda remains bullish. The company's strategic partnership with Sony to sell an electric vehicle in the U.S. and Japan is also expected to contribute to its growth [5].

In conclusion, Honda Motor Co. Ltd. stands to benefit significantly from the new U.S.-Japan trade deal, with analysts predicting a substantial upside potential for the stock. The company's strategic partnerships and strong market sentiment further support its financial outlook.

References:
[1] Reuters. (2025, July 23). Japanese automaker shares jump after Trump trade deal. Retrieved from https://www.reuters.com/business/autos-transportation/japanese-automaker-shares-jump-after-trump-trade-deal-2025-07-23/
[2] Stocktwits. (2025, July 24). Markets: Equity: Honda, Tesla, Cenntro dominate retail conversations among automotive stocks. Retrieved from https://stocktwits.com/news-articles/markets/equity/honda-tesla-cenntro-dominate-retail-conversations-among-automotive-stocks/ch8yukIR5H4
[3] Benzinga. (2025, July 25). What does the market think about Honda Motor Co? Retrieved from https://www.benzinga.com/insights/short-sellers/25/07/46602842/what-does-the-market-think-about-honda-motor-co
[4] Seeking Alpha. (2025, July 24). Sony and Honda plan to sell an electric vehicle together next year in the US and Japan. Retrieved from https://seekingalpha.com/news/4471536-sony-and-honda-plan-to-sell-an-electric-vehicle-together-next-year-in-the-us-and-japan