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Honda Motor Co
(7267)
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Rating:59Neutral
Price Target:
¥1,759.00
▲(14.52% Upside)
Action:Reiterated
Date:08/09/26
The score is held back primarily by weak recent financial performance (loss-making TTM results, higher leverage, and sharply weaker free cash flow). This is partially offset by strong technical momentum (price above key moving averages with positive MACD) and an encouraging earnings call with raised guidance and strong Q1 results, though tempered by significant China/EV cost and production-disruption risks. Valuation support comes mainly from the high dividend yield, while the negative P/E reflects current earnings weakness.
Positive Factors
Motorcycle business profitability & scale
Honda's motorcycle segment delivered record quarterly margins and very large unit volumes, driven by Asia and Brazil. Durable scale and high margins create recurring parts/service revenue, steady cash generation and operational resilience that buffers the company from weakness in other segments over the medium term.
Negative Factors
Large, uncertain EV‑related losses
EV supplier compensation is a material, ongoing exposure with unclear timing and quantum. Large potential hit to earnings and cash flow creates stepwise recognition risk and complicates capital allocation, making multi‑quarter earnings visibility and planning more uncertain.
Read all positive and negative factors
Positive Factors
Negative Factors
Motorcycle business profitability & scale
Honda's motorcycle segment delivered record quarterly margins and very large unit volumes, driven by Asia and Brazil. Durable scale and high margins create recurring parts/service revenue, steady cash generation and operational resilience that buffers the company from weakness in other segments over the medium term.
Read all positive factors
Honda Motor Co (7267) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥6.33T
Dividend Yield4.31%
Average Volume (3M)14.47M
Price to Earnings (P/E)―
Beta (1Y)1.13
Revenue Growth0.50%
EPS Growth-163.81%
CountryJP
Employees195,109
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Manufacturers
Share Statistics
EPS (TTM)-38.89
Shares Outstanding4,533,000,000
10 Day Avg. Volume15,290,380
30 Day Avg. Volume14,470,826
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)0.43
Price to Sales (P/S)0.23
P/FCF Ratio9.61
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥1,585.33Price Target Upside3.21% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)129.11
Revenue Forecast (FY)¥23.38T
Honda Motor Co Business Overview & Revenue Model
Company Description
Honda Motor Co., Ltd., founded in 1946 and based in Tokyo, Japan, is a multinational corporation involved in the development, production, and global sale of motorcycles, automobiles, power equipment, and other specialized items. Its market presenc...
How the Company Makes Money
Honda makes money mainly by selling physical products (motorcycles, automobiles, and power products) and by earning finance-related income tied to those sales. (1) Motorcycle business: Revenue is generated from the sale of motorcycles and scooters...
Honda Motor Co Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Neutral
The call presented strong operating and cash results (record Q1 operating profit, all-time high motorcycle profitability, improved full-year guidance and a robust net cash position) which are clear positives. However, substantial near-term risks were emphasized: a pronounced slowdown in China automotive demand, large and uncertain EV-related supplier compensation exposure (EV losses revised to JPY 520 billion), elevated material and semiconductor costs, and production disruptions from the Kumamoto earthquake. These significant headwinds offset some of the operational strength and create earnings visibility risk for upcoming quarters.Positive Updates
Record-High Q1 Operating Profit
Operating profit for Q1 reached a record JPY 530.7 billion (up JPY 286.5 billion YoY). Adjusted operating profit (excluding EV-related losses) was also JPY 530.7 billion, up JPY 164.5 billion YoY.
Negative Updates
Significant Weakness in China Automotive Market
Automobile sales decreased (total auto unit sales Q1 786,000 units), driven by a sharp slowdown in China: ICE/Hybrid market reportedly shrank ~40% YoY, Honda retail units in China were ~80,000 in Q1 (roughly 50% lower than prior-year Q1). Full-year China outlook remains uncertain.
Read all updates
Q1-2027 Updates
Positive
Negative
Record-High Q1 Operating Profit
Operating profit for Q1 reached a record JPY 530.7 billion (up JPY 286.5 billion YoY). Adjusted operating profit (excluding EV-related losses) was also JPY 530.7 billion, up JPY 164.5 billion YoY.
Read all positive updates
Company Guidance
Guidance for the fiscal year ending March 31, 2027: Honda revised operating profit to JPY 650 billion (up JPY 150 billion), adjusted operating profit excluding EV‑related losses to JPY 1.17 trillion (up JPY 170 billion), and profit attributable to owners to JPY 400 billion (up JPY 140 billion); EV‑related losses were revised to JPY 520 billion (from JPY 500 billion, reflecting FX) and no EV‑related losses were posted in Q1. Unit‑sale guidance is unchanged: Motorcycles 22.8 million, Automobiles 3.39 million, Power Products 3.65 million, with an exchange assumption of JPY 155/USD; annual dividend remains JPY 70/share (target DOE 3%). Q1 metrics include record operating profit JPY 530.7 billion, quarterly profit attributable JPY 450.9 billion, motorcycle operating profit JPY 233.9 billion, automobile operating profit JPY 192.1 billion, financial services JPY 105.8 billion, power products/other loss JPY 1.1 billion, unit sales — motorcycles 5,663,000, automobiles 786,000, power products 752,000 — free cash flow (non‑financial) JPY 128.3 billion, net cash (non‑financial services) JPY 3,331.8 billion and operating cash flow after R&D JPY 737.1 billion; key FY drivers called out were sales +JPY 266.7 billion, price/cost -JPY 313 billion, FX +JPY 28 billion and tariffs +JPY 147 billion, with FX sensitivity roughly JPY 10–12 billion per JPY 1.Honda Motor Co Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
54
Neutral
Cash Flow
45
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 22.52T | 21.80T | 21.69T | 20.43T | 16.91T | 14.55T |
| Gross Profit | 3.88T | 3.60T | 4.66T | 4.41T | 3.33T | 2.98T |
| EBITDA | 1.20T | 983.52B | 2.12T | 2.50T | 1.64T | 1.70T |
| Net Income | -169.70B | -423.94B | 835.84B | 1.11T | 651.42B | 707.07B |
Balance Sheet | ||||||
| Total Assets | 34.44T | 33.51T | 30.78T | 29.77T | 24.67T | 23.97T |
| Cash, Cash Equivalents and Short-Term Investments | 5.30T | 5.07T | 4.74T | 5.18T | 4.07T | 3.89T |
| Total Debt | 14.07T | 13.48T | 11.77T | 10.08T | 7.62T | 8.05T |
| Total Liabilities | 21.81T | 21.36T | 18.15T | 16.77T | 13.12T | 13.20T |
| Stockholders Equity | 12.36T | 11.82T | 12.33T | 12.70T | 11.23T | 10.47T |
Cash Flow | ||||||
| Free Cash Flow | 157.23B | 523.20B | -218.65B | 138.61B | 1.50T | 1.23T |
| Operating Cash Flow | 1.34T | 1.14T | 292.15B | 747.28B | 2.13T | 1.68T |
| Investing Cash Flow | -1.04T | -852.17B | -941.97B | -867.27B | -678.06B | -376.06B |
| Financing Cash Flow | 538.64B | -36.92B | 280.48B | 918.65B | -1.47T | -615.72B |
Honda Motor Co Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | ¥4.09T | 9.16 | 13.72% | 2.24% | 8.03% | 5.58% | |
64 Neutral | ¥32.63T | 10.39 | 10.10% | 3.28% | 5.51% | -18.10% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | ¥6.33T | -15.06 | -3.53% | 4.42% | 0.50% | -163.81% | |
59 Neutral | ¥1.94T | 21.76 | 3.31% | 4.52% | 2.12% | -72.85% | |
59 Neutral | ¥1.28T | 48.71 | 2.35% | 2.74% | 3.06% | -67.47% | |
46 Neutral | ¥1.18T | -2.20 | -11.10% | ― | -4.95% | 20.71% |
* Consumer Cyclical Sector Average
JP:7267
Honda Motor Co
1,683.00
151.65
9.90%
JP:7203
Toyota Motor
2,980.00
289.09
10.74%
JP:7270
SUBARU
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Nissan Motor Co
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8.30
2.50%
JP:7269
Suzuki Motor
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11.04%
JP:7272
Yamaha Motor Co
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806.17
77.79%
Honda Motor Co Corporate Events
Honda Boosts FY2027 Earnings Forecast on Weaker Yen and Profit Recovery
Aug 5, 2026
Honda Motor Co. has sharply raised its forecast for consolidated results for the fiscal year ending March 31, 2027, reflecting a weaker Japanese yen against the U.S. dollar and updated exchange assumptions. The company now expects sales revenue of...
Honda’s Quarterly Profit Surges as Revenue Climbs, Dividend Guidance Held Steady
Aug 5, 2026
Honda reported strong consolidated results for the three months ended June 30, 2026, with sales revenue rising 13.5% year on year to ¥6.06 trillion and operating profit surging 117.4% to ¥530.8 billion. Profit attributable to owners of t...
Honda Delays Closing of Astemo Stake Increase but Sees Little Earnings Impact
Jun 30, 2026
Honda has updated the timeline for its planned acquisition of an additional 21% stake in Astemo, Ltd., an equity‑method affiliate jointly owned with Hitachi, Ltd. and JIC Capital Ltd., which will make Astemo a consolidated subsidiary. Becaus...
Honda Puts Ontario EV Value Chain Project on Indefinite Hold
May 14, 2026
Honda Motor Co. has indefinitely suspended its previously announced plan to build a comprehensive electric vehicle value chain in Ontario, Canada, intended to strengthen its EV supply chain in North America. The project, which had already been pos...
Honda Overhauls Board Structure and Leadership to Strengthen Governance
May 14, 2026
Honda Motor Co., Ltd. has revised its slate of director candidates ahead of its June 2026 ordinary shareholders’ meeting, elevating Mahito Shikama from managing officer at Honda RD Co., Ltd. to executive officer and director at the parent co...
Honda Earnings Land Near Upper End of Guidance Despite EV Losses
May 14, 2026
Honda Motor Co., Ltd. reported consolidated results for the year ended March 31, 2026 that came in near the upper end of its previously announced forecast range, with sales revenue rising to ¥21.8 trillion. The performance reflects higher uni...
Honda Swings to Loss but Holds Dividend and Targets Profit Rebound
May 14, 2026
Honda Motor Co. reported flat sales revenue of ¥21.8 trillion for the year ended March 31, 2026, but swung to an operating loss of ¥414.3 billion and a net loss attributable to owners of ¥423.9 billion, largely reversing last year&#...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.