Honda Motor Co (7267) AI Stock Analysis

• Market Cap: ¥7.25T
• Dividend Yield: 4.53%
• Average Volume (3M): 17.06M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.18
• Revenue Growth: 6.17%
• EPS Growth: -21.69%
• Country: JP
• Employees: 194,993
• Sector: Consumer Cyclical
• Sector Strength: 65
• Industry: Auto - Manufacturers
• EPS (TTM): 9.24
• Shares Outstanding: 5,280,000,000
• 10 Day Avg. Volume: 16,121,309
• 30 Day Avg. Volume: 17,057,266
• PEG Ratio: -0.42
• Price to Book (P/B): 0.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -19.59
• 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: ¥1,617.41
• Price Target Upside: 7.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 74 Outperform
• Price Target: ¥1,562.00 ▲(3.96%Upside)

Honda Motor Co's overall stock score is driven by strong financial health and attractive valuation, despite pressures on profitability and cash flow. The mixed technical outlook and balanced earnings call sentiment suggest a cautious but potentially rewarding investment, especially with the valuation appealing to long-term and income-focused investors.

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.

Investment budget

Honda is reducing its investment budget for battery electric vehicles from ¥10tn to ¥7tn, indicating a strategic reallocation of resources.

Operating profit guidance

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 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 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 Financial Statement Overview

Summary

Honda Motor Co demonstrates strong revenue growth and stable financial health. However, profitability margins have faced pressure with a decrease in net profit margin and negative Free Cash Flow due to increased capital expenditures. Maintaining cash flow and improving margins are key areas for focus.

Income Statement

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

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

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.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	21.69T	20.43T	16.91T	14.55T	13.17T
Gross Profit	4.66T	4.41T	3.33T	2.98T	2.73T
EBITDA	2.11T	2.50T	2.40T	2.36T	2.08T
Net Income	835.84B	1.11T	651.42B	707.07B	657.42B
Balance Sheet
Total Assets	30.78T	29.77T	24.67T	23.97T	21.92T
Cash, Cash Equivalents and Short-Term Investments	4.53T	5.18T	4.07T	3.89T	3.05T
Total Debt	11.45T	10.08T	7.67T	8.10T	7.72T
Total Liabilities	18.15T	16.77T	13.12T	13.20T	12.55T
Stockholders Equity	12.33T	12.70T	11.23T	10.47T	9.08T
Cash Flow
Free Cash Flow	-218.65B	138.61B	1.50T	1.23T	521.24B
Operating Cash Flow	292.15B	747.28B	2.13T	1.68T	1.07T
Investing Cash Flow	-941.97B	-867.27B	-678.06B	-376.06B	-796.88B
Financing Cash Flow	280.48B	918.65B	-1.47T	-615.72B	-283.98B

Honda Motor Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1502.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 1502.5 is above the 20-day moving average (MA) of 1444.58, above the 50-day MA of 1435.46, and above the 200-day MA of 1411.37, indicating a bullish trend. The MACD of 24.37 indicates Negative momentum. The RSI at 59.32 is Neutral, neither overbought nor oversold. The STOCH value of 68.60 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7203	75 Outperform	¥32.75T	7.01	13.59%	3.98%	6.52%	-1.47%
7267	74 Outperform	¥7.25T	8.35	6.54%	4.53%	6.17%	-21.69%
7270	74 Outperform	$1.87T	5.53	12.64%	5.23%	-0.37%	-10.12%
6201	69 Neutral	¥5.04T	18.94	4.70%	1.73%	6.57%	15.79%
7269	66 Neutral	$3.25T	7.70	15.02%	2.54%	8.39%	55.79%
Sector *	63 Neutral	$16.78B	10.88	-7.08%	3.04%	1.73%	-25.15%
7201	45 Neutral	$1.08T	12.25	-12.13%	8.35%	-0.41%	-274.49%

Honda Motor Co Corporate Events

Honda Announces Progress in Share Buyback Program

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

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

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

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

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

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.

Honda Announces Progress in Share Buyback Program

Honda Motor Co., Ltd. announced the status of its share buyback program, acquiring 119,047,400 shares of common stock for a total of 159.37 billion yen between April 1 and April 30, 2025. This move is part of a larger initiative approved by the Board of Directors to repurchase up to 1.1 billion shares by the end of 2025, aiming to enhance shareholder value and optimize capital structure.