Honda Motor Co (7267) AI Stock Analysis

• Market Cap: ¥6.35T
• Dividend Yield: 4.41%
• Average Volume (3M): 14.47M
• Price to Earnings (P/E): 10.2
• Beta (1Y): 1.18
• Revenue Growth: -0.43%
• EPS Growth: -26.68%
• Country: JP
• Employees: 194,993
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 29.50
• Shares Outstanding: 5,280,000,000
• 10 Day Avg. Volume: 15,290,380
• 30 Day Avg. Volume: 14,470,826
• PEG Ratio: -0.36
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 0.29
• P/FCF Ratio: -28.68
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥1,751.81
• Price Target Upside: 14.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: ¥1,758.00 ▲(14.71% Upside)

Overall score reflects near-term fundamental pressure (TTM revenue drop, margin compression, and negative free cash flow) partially offset by solid technical momentum and an attractive valuation supported by a high dividend yield and low P/E.

Positive Factors

Diversified revenue streams

Honda's multi-product footprint (autos, motorcycles, power equipment) and global sales base create durable revenue diversification. This reduces reliance on any single market or cycle, smoothing cash flow and supporting investment capacity for EV and R&D programs over the medium term.

Stable capitalization and equity base

A sizable equity base and historically moderate leverage provide financial flexibility to fund capex, R&D and strategic M&A while weathering cyclical downturns. This capitalization supports long-term investments in EVs, batteries and technology without immediate solvency pressure.

Vertical battery strategy (asset acquisition)

Acquiring battery plant assets is a structural move toward upstream control of EV supply chains. It can secure cell supply, lower per‑unit battery costs, and improve margin capture across EV vehicles over time, strengthening Honda's competitiveness in electrification.

Negative Factors

Sharp recent revenue decline

A roughly 46% TTM revenue drop signals meaningful demand, mix or timing deterioration that undermines scale economies and pricing power. Sustained revenue weakness pressures margins, reduces reinvestment capacity and heightens execution risk for long‑term EV and product programs.

Deteriorating cash generation

Recent negative FCF reverses prior strong cash conversion, constraining funding for capex, battery investments and dividends without raising external financing. Prolonged weak cash generation can force asset sales, higher leverage or cutbacks in strategic R&D spending.

Product recalls and operational disruptions

Large safety recalls and production halts reflect quality and supply‑chain vulnerabilities that raise warranty, remediation and regulatory costs. Persisting operational disruptions can erode brand trust, depress sales and increase long‑term service liabilities, harming margins and market share.

Honda Motor Co Business Overview & Revenue Model

Company Description

Honda Motor Co., Ltd. develops, manufactures, and distributes motorcycles, automobiles, power products, and other products in Japan, North America, Europe, Asia, and internationally. It operates through four segments: Motorcycle Business, Automobile Business, Financial Services Business, and Life Creation and Other Businesses. The Motorcycle Business segment produces motorcycles, including sports, business, and commuter models; and various off-road vehicles, such as all-terrain vehicles and side-by-sides. The Automobile Business segment offers passenger cars, light trucks, and mini vehicles. The Financial Services Business segment provides various financial services, including retail lending and leasing services to customers, as well as wholesale financing services to dealers. The Life Creation and Other Businesses segment manufactures and sells power products, such as general purpose engines, generators, water pumps, lawn mowers, riding mowers, robotic mowers, brush cutters, tillers, snow blowers, outboard marine engines, walking assist devices, and portable battery inverter power sources. This segment also offers HondaJet aircraft. The company also sells spare parts; and provides after-sale services through retail dealers directly, as well as through independent distributors and licensees. Honda Motor Co., Ltd. was founded in 1946 and is headquartered in Tokyo, Japan.

How the Company Makes Money

Honda generates revenue through multiple key streams, primarily from the sale of automobiles and motorcycles. The automotive segment, which includes both passenger cars and light trucks, represents the largest portion of its revenue, driven by popular models such as the Honda Civic and CR-V. The motorcycle segment also contributes significantly, known for its extensive range of motorbikes catering to various markets. Additionally, Honda earns income from power equipment sales, including generators and lawn mowers. The company has strategic partnerships and collaborations that enhance its product offerings and market reach, including joint ventures in emerging markets. Furthermore, Honda's investment in research and development, particularly in electric and hybrid vehicle technologies, positions it to capitalize on evolving consumer preferences and regulatory trends, contributing to long-term profitability.

Honda Motor Co Financial Statement Overview

Summary

Mixed fundamentals: a reasonably stable balance sheet (moderate leverage, large equity base) is outweighed by weaker recent operating trends—TTM revenue down sharply (-46.4%), profitability compressed (net margin down to ~3.0%), and cash generation deteriorated with negative free cash flow in FY2025 and TTM.

Income Statement

Revenue grew solidly from FY2022 to FY2024, but the latest TTM (Trailing-Twelve-Months) shows a sharp revenue decline (-46.4%), signaling meaningful near-term demand/mix or timing pressure. Profitability has been historically decent for the sector (gross margin ~20–22%), but earnings power has softened: net margin fell from 5.4% (FY2024) to 3.0% in TTM, and operating margin also stepped down versus FY2024. Overall, the income statement reflects a company with proven scale and margins, but with a weaker recent trajectory and higher volatility in growth and profitability.

Balance Sheet

The balance sheet looks reasonably stable with a large equity base (equity ~¥12T+) and improving asset scale over time. Leverage is moderate historically (debt-to-equity ~0.68–0.96 across FY2021–FY2025 annual), and returns on equity have generally been mid-single digits to high-single digits, peaking in FY2024 (~8.7%) before easing in FY2025 (~6.8%). A key flag is that TTM reports total debt as zero, which is inconsistent with prior years and may reflect reporting/classification differences—so leverage trends should be interpreted with caution. Net: solid capitalization and acceptable leverage, but not a standout return profile and some data consistency risk in the latest period.

Cash Flow

Cash generation has weakened materially. Operating cash flow dropped sharply versus prior years, and in both FY2025 and TTM (Trailing-Twelve-Months) operating cash flow covers only a small portion of net income (low conversion), suggesting working-capital drag or lower cash profitability. Free cash flow is negative in FY2025 and remains negative in TTM, reversing the strong positive free cash flow seen in FY2022–FY2024. While the business has demonstrated an ability to produce healthy free cash flow in better periods, the latest cash-flow profile raises near-term quality-of-earnings and funding flexibility concerns.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	21.52T	21.69T	20.43T	16.91T	14.55T	13.17T
Gross Profit	4.47T	4.66T	4.41T	3.33T	2.98T	2.73T
EBITDA	2.02T	2.12T	2.50T	1.64T	1.70T	1.55T
Net Income	652.98B	835.84B	1.11T	651.42B	707.07B	657.42B
Balance Sheet
Total Assets	31.49T	30.78T	29.77T	24.67T	23.97T	21.92T
Cash, Cash Equivalents and Short-Term Investments	4.84T	4.74T	5.18T	4.07T	3.89T	3.05T
Total Debt	0.00	11.77T	10.08T	7.62T	8.05T	8.04T
Total Liabilities	19.25T	18.15T	16.77T	13.12T	13.20T	12.55T
Stockholders Equity	11.96T	12.33T	12.70T	11.23T	10.47T	9.08T
Cash Flow
Free Cash Flow	-93.79B	-218.65B	138.61B	1.50T	1.23T	521.24B
Operating Cash Flow	589.32B	292.15B	747.28B	2.13T	1.68T	1.07T
Investing Cash Flow	-779.58B	-941.97B	-867.27B	-678.06B	-376.06B	-796.88B
Financing Cash Flow	62.29B	280.48B	918.65B	-1.47T	-615.72B	-283.98B

Honda Motor Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1532.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7267, the sentiment is Negative. The current price of 1532.5 is below the 20-day moving average (MA) of 1580.27, below the 50-day MA of 1562.48, and above the 200-day MA of 1514.96, indicating a neutral trend. The MACD of -4.01 indicates Positive momentum. The RSI at 43.13 is Neutral, neither overbought nor oversold. The STOCH value of 7.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7267.

Honda Motor Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7203	80 Outperform	¥45.67T	9.73	12.89%	2.78%	6.44%	11.88%
7270	76 Outperform	¥2.38T	8.95	9.73%	3.61%	1.04%	-31.52%
6201	74 Outperform	¥6.13T	29.20	3.94%	0.78%	2.91%	-11.26%
7269	72 Outperform	¥4.13T	10.29	12.95%	1.85%	2.99%	9.99%
7267	63 Neutral	¥6.35T	10.23	5.23%	4.41%	-0.43%	-26.68%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7201	49 Neutral	¥1.32T	-1.44	-16.69%	―	-3.01%	-755.71%

Honda Motor Co Corporate Events

Honda Acquires Additional Stake in Astemo to Boost SDV Capabilities

Honda Motor Co. has announced its decision to acquire an additional 21% equity interest in Astemo, Ltd., transforming it into a consolidated subsidiary. This strategic move aims to strengthen Honda’s position in the rapidly changing automotive industry, particularly in the development of software-defined vehicles, by leveraging Astemo’s expertise in both hardware and software technologies. The acquisition is expected to enhance Honda’s development capabilities and cost competitiveness, positioning Astemo as a key partner in achieving sustainable growth and solidifying its status as a global mega supplier.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1900.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Reports Decline in First-Half Fiscal Year 2025 Financial Results

Honda Motor Co. reported a decline in its financial performance for the first half of the fiscal year ending September 30, 2025, with significant decreases in sales revenue, operating profit, and profit before income taxes compared to the previous year. Despite the downturn, the company showed a notable increase in comprehensive income, indicating potential resilience in certain areas. The announcement highlights challenges in maintaining profitability and the need for strategic adjustments to improve financial health and stakeholder confidence.

The most recent analyst rating on (JP:7267) stock is a Hold with a Yen1677.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.