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Honda Motor Co Ltd (JP:7267)
:7267
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Honda Motor Co (7267) AI Stock Analysis

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JP:7267

Honda Motor Co

(OTC:7267)

Rating:74Outperform
Price Target:
¥1,869.00
▲(13.82% Upside)
Honda Motor Co's overall stock score reflects a strong technical outlook and attractive valuation, offset by mixed financial performance and risks highlighted in the earnings call. The company's stable balance sheet and dividend yield are positives, but revenue growth challenges and cash flow concerns need addressing.
Positive Factors
Dividend Policy
Honda has changed its dividend policy to dividends on equity (DOE), raising its dividend per share from ¥68 in results to ¥70 in guidance.
Motorcycle Business
Outlook turning more positive on motorcycle business; Expect positive momentum on sales.
Share Buybacks
Honda reconfirmed its commitment to continuing share buybacks, which may be a step forward towards ending the run of bad news.
Negative Factors
China Market Challenges
Honda's soft margins were driven by lower auto operating margins on challenges in its China market.
Exchange Rates
The effects of exchange rates including emerging market currencies are expected to hold back profit.
Operating Profit
FY3/26 guidance is for operating profit to fall 59% year over year, assuming ¥135/$ and factoring in the impact of tariffs, much lower than expected.

Honda Motor Co (7267) vs. iShares MSCI Japan ETF (EWJ)

Honda Motor Co Business Overview & Revenue Model

Company DescriptionHonda 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 MoneyHonda Motor Co. generates revenue through several key streams. The primary source is the sale of automobiles, which includes a broad range of vehicles from compact cars to SUVs and luxury vehicles. The motorcycle segment is another significant contributor, with Honda being one of the largest motorcycle manufacturers globally. Additionally, the power products segment adds to revenue through the sale of engines, generators, and other power equipment. Honda also benefits from financial services, offering leasing and financing options to customers, which supports vehicle sales and provides a steady flow of income. Strategic partnerships and joint ventures in various regions help Honda enhance its market presence and access new technologies, further contributing to its financial performance.

Honda Motor Co Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed view with strong performance in the motorcycle segment and cash flow management, but significant challenges in the automobile sector and external threats from tariffs and a sluggish EV market. While shareholder returns have been improved, the outlook faces pressure from both internal and external factors.
Q4-2025 Updates
Positive Updates
Record Motorcycle Sales
The motorcycle business achieved record highs in unit sales, operating profit, and operating profit margin with 20.572 million units sold, primarily due to increased demand in Asia, marking an increase year-on-year.
Strong Operating Cash Flow
Operating cash flow after R&D adjustments remained high, reaching JPY 2.800 trillion, indicating a strong source of future investment.
Dividend Increase
Annual dividend will increase by JPY 2 from JPY 68 to JPY 70 per share as part of a new dividend policy aimed at improving capital efficiency and ensuring stable shareholder dividends.
Hybrid EV Sales Expansion
Despite challenges, hybrid EV sales expanded significantly, particularly in North America, contributing to a stable revenue base.
Negative Updates
Automobile Sales Decline
The automobile business saw a decline in unit sales, mainly in China and ASEAN regions, and was affected by increased incentives for EVs in North America.
Impact of Tariff Policies
Tariff policies present significant challenges, with estimated impacts of JPY 650 billion due to various tariffs, affecting operating profit projections.
Decrease in Net Profit
Net profit attributable to the owner of the parent decreased by JPY 271.3 billion to JPY 835.8 billion, reflecting declines in sales volume in China and other factors.
Slowed EV Market Growth
The electric vehicle market growth has slowed down more than expected, leading to a postponement of large scale investments in Canada.
Company Guidance
In the recent financial results call, Honda provided guidance for the fiscal year ending March 2026, highlighting several key metrics. The company reported an operating profit of JPY 1.213.4 trillion for the fiscal year ending March 2025, with adjustments reflecting a JPY 1.341 trillion profit excluding a one-time expense. Looking ahead, Honda set minimum operating profit and net profit targets at JPY 500 billion and JPY 250 billion, respectively, for the next fiscal year, acknowledging challenges from tariff policies and fluctuating market conditions. The motorcycle business is projected to increase sales to 21.3 million units, while the automobile segment anticipates 3.62 million units sold, despite tariff impacts. The company also announced a change in its dividend policy, increasing the annual dividend from JPY 68 to JPY 70 per share. Honda aims to enhance profitability by expanding hybrid EV sales, particularly in North America, and carefully assessing the impact of tariff policies while implementing recovery measures.

Honda Motor Co Financial Statement Overview

Summary
Honda Motor Co demonstrates strong revenue growth and stable financial health. However, profitability margins have faced pressure recently, and cash flow management poses a risk with negative Free Cash Flow driven by increased capital spending.
Income Statement
85
Very Positive
Honda Motor Co has shown consistent revenue growth, increasing from ¥13.17 trillion in 2021 to ¥21.69 trillion in 2025. The Gross Profit Margin is stable, with a slight increase from previous years, indicating efficient cost management. However, the Net Profit Margin has decreased from 5.42% in 2024 to 3.85% in 2025, suggesting potential pressure on profitability. EBIT and EBITDA margins are healthy, demonstrating robust earnings before interest and taxes.
Balance Sheet
78
Positive
The company's financial leverage is moderate with a Debt-to-Equity Ratio around 0.93 in 2025. Honda's Return on Equity has been relatively stable but slightly impacted by the decrease in net income. The Equity Ratio is healthy at approximately 40%, indicating a strong equity base. There are no significant liquidity concerns with cash reserves supporting short-term obligations.
Cash Flow
72
Positive
Operating Cash Flow has decreased in 2025 compared to 2024, affecting the Free Cash Flow which turned negative in 2025, primarily due to high capital expenditures. The Operating Cash Flow to Net Income Ratio remains positive, though lower than prior periods, reflecting a need for improved operational cash generation.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue21.69T21.69T20.43T16.91T14.55T13.17T
Gross Profit4.66T4.66T4.41T3.33T2.98T2.73T
EBITDA2.03T2.11T2.50T2.40T2.36T2.08T
Net Income835.84B835.84B1.11T651.42B707.07B657.42B
Balance Sheet
Total Assets30.78T30.78T29.77T24.67T23.97T21.92T
Cash, Cash Equivalents and Short-Term Investments4.53T4.53T5.18T4.07T3.89T3.05T
Total Debt11.45T11.45T10.08T7.67T8.10T7.72T
Total Liabilities18.15T18.15T16.77T13.12T13.20T12.55T
Stockholders Equity12.33T12.33T12.70T11.23T10.47T9.08T
Cash Flow
Free Cash Flow-375.72B-218.65B138.61B1.50T1.23T521.24B
Operating Cash Flow292.15B292.15B747.28B2.13T1.68T1.07T
Investing Cash Flow-941.97B-941.97B-867.27B-678.06B-376.06B-796.88B
Financing Cash Flow280.48B280.48B918.65B-1.47T-615.72B-283.98B

Honda Motor Co Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1642.00
Price Trends
50DMA
1546.33
Positive
100DMA
1477.88
Positive
200DMA
1426.69
Positive
Market Momentum
MACD
32.97
Positive
RSI
54.14
Neutral
STOCH
26.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7267, the sentiment is Positive. The current price of 1642 is above the 20-day moving average (MA) of 1633.10, above the 50-day MA of 1546.33, and above the 200-day MA of 1426.69, indicating a bullish trend. The MACD of 32.97 indicates Positive momentum. The RSI at 54.14 is Neutral, neither overbought nor oversold. The STOCH value of 26.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7267.

Honda Motor Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$7.92T11.595.17%4.14%1.96%-39.57%
61
Neutral
$17.64B14.17-5.23%3.04%1.43%-15.11%
¥37.49T8.8111.91%3.13%
$14.58B7.4811.75%3.72%
$7.82B12.42-15.23%6.10%
$26.26B9.6513.92%1.95%
$34.50B19.734.89%1.67%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:7267
Honda Motor Co
1,642.00
102.70
6.67%
GB:TYT
Toyota Motor
2,873.00
153.04
5.63%
FUJHF
SUBARU
21.00
2.97
16.47%
NSANF
Nissan Motor Co
2.20
-0.68
-23.61%
SZKMF
Suzuki Motor
13.50
2.27
20.21%
TYIDF
Toyota
110.95
35.53
47.11%

Honda Motor Co Corporate Events

Honda Motor Co. Revises Financial Forecast Upward for FY 2026
Aug 6, 2025

Honda Motor Co. has revised its financial forecast for the fiscal year ending March 31, 2026, significantly increasing its profit expectations due to favorable tariff impacts and foreign exchange conditions. This upward revision reflects a positive outlook for the company’s financial performance, suggesting potential benefits for stakeholders and strengthening its competitive position in the market.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Reports Sharp Decline in Q1 Financial Results
Aug 6, 2025

Honda Motor Co. reported a significant decline in its financial performance for the first quarter ended June 30, 2025, with operating profit and profit before income taxes dropping by nearly 50% compared to the previous year. This downturn is attributed to various market challenges, impacting stakeholders and potentially influencing the company’s strategic decisions moving forward.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Announces Progress in Share Buyback Program
Aug 4, 2025

Honda Motor Co., Ltd. announced the acquisition of its own shares, acquiring 93,027,200 shares of common stock for 143,513,664,355 yen from July 1 to July 31, 2025. This move is part of a larger plan approved by the Board of Directors to acquire up to 1,100,000,000 shares by the end of 2025, aiming to enhance shareholder value and optimize capital structure.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Announces Progress in Share Buyback Program
Jul 2, 2025

Honda Motor Co., Ltd. has announced the status of its share buyback program, which involves acquiring its own shares as per the company’s Articles of Incorporation. Between June 1 and June 30, 2025, Honda acquired 64,691,100 shares of common stock for a total of 91,603,550,703 yen. This move is part of a larger plan to acquire up to 1,100,000,000 shares, representing 23.7% of the total issued shares, by the end of 2025. The buyback is expected to impact the company’s stock value and shareholder returns positively.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Motor Co. Announces Share Buyback Progress
Jun 3, 2025

Honda Motor Co., Ltd. announced the acquisition of 77,186,000 of its own shares, amounting to 111,908,296,920 yen, during the period from May 1 to May 31, 2025. This move is part of a larger plan to acquire up to 1.1 billion shares by the end of 2025, reflecting the company’s strategic efforts to enhance shareholder value and optimize its capital structure.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Motor Co. Announces 101st Shareholders Meeting
May 19, 2025

Honda Motor Co., Ltd. has announced the convening of its 101st Ordinary General Meeting of Shareholders, scheduled for June 19, 2025, in Tokyo. The meeting will cover the business report and financial statements for the fiscal year ending March 31, 2025, and will include the election of twelve directors, impacting the company’s governance and strategic direction.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Delays Canadian EV Value Chain Project Amid Demand Slowdown
May 13, 2025

Honda Motor Co., Ltd. has announced a two-year postponement of its plan to establish a comprehensive electric vehicle value chain in Ontario, Canada, due to a slowdown in EV demand. This delay impacts Honda’s strategy to strengthen its EV supply chain in North America, which was initially set to involve a significant investment of CAD$15 billion and collaboration with joint venture partners to build EV and battery plants. The project, which aims to prepare for future EV demand, is expected to create numerous jobs and contribute to the Canadian EV manufacturing ecosystem once resumed.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Motor Co. Revises Stock Compensation Scheme to Boost Executive Collaboration
May 13, 2025

Honda Motor Co., Ltd. announced a revision to its stock compensation scheme for Operating Executives and Management positions, expanding the eligible employees and aligning with its human resources measures. This revision aims to enhance the company’s merit-based system, fostering long-term social and economic value through collaboration among its executives and management.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

Honda Motor Co. Reports Fiscal Year 2025 Financial Results
May 13, 2025

Honda Motor Co. reported its consolidated financial results for the fiscal year ending March 31, 2025, showing a 6.2% increase in sales revenue to 21,688,767 million yen. However, the company experienced declines in operating profit and profit before income taxes by 12.2% and 19.8%, respectively, compared to the previous fiscal year. The profit for the year attributable to owners of the parent dropped by 24.5%, and comprehensive income fell by 63.1%. The company also implemented a three-for-one stock split effective October 1, 2023. These results indicate challenges in maintaining profitability despite revenue growth, impacting stakeholders and potentially influencing future strategic decisions.

The most recent analyst rating on (JP:7267) stock is a Buy with a Yen1750.00 price target. To see the full list of analyst forecasts on Honda Motor Co stock, see the JP:7267 Stock Forecast page.

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.Date of analysis: Aug 20, 2025