tiprankstipranks
Trending News
More News >
Honda Motor Co Ltd (JP:7267)
:7267

Honda Motor Co (7267) AI Stock Analysis

Compare
15 Followers

Top Page

JP

Honda Motor Co

(OTC:7267)

Rating:75Outperform
Price Target:
¥1,614.00
▲(16.96%Upside)
Honda Motor Co's overall stock score reflects a combination of strong valuation and financial performance, tempered by technical analysis and mixed earnings call sentiment. The company's solid revenue growth and attractive valuation provide a strong foundation, but challenges in the automobile segment and cash flow management require attention.
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
BEV Investment Reduction
Honda is reducing its investment budget for battery electric vehicles from ¥10tn to ¥7tn, indicating a strategic reallocation of resources.
Exchange Rate Impact
The effects of exchange rates including emerging market currencies are expected to hold back profit.
Operating Profit Forecast
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. is a Japanese multinational conglomerate primarily known for manufacturing automobiles, motorcycles, and power equipment. Founded in 1948 and headquartered in Tokyo, Japan, Honda operates in multiple sectors, including automotive, motorcycle, and power products. With a strong global presence, the company is renowned for its innovation, quality, and reliability, offering a diverse range of products from fuel-efficient vehicles and high-performance motorcycles to cutting-edge power equipment and advanced robotics.
How the Company Makes MoneyHonda Motor Co. makes money through several key revenue streams. The primary source of revenue is its automotive division, which generates income from the sale of cars, SUVs, and trucks worldwide. This includes popular models like the Honda Civic, Accord, CR-V, and the Acura luxury brand. The motorcycle division is another significant contributor, with Honda being one of the largest motorcycle manufacturers globally, offering a range of models from commuter bikes to high-performance sports motorcycles. Additionally, Honda's power products division provides revenue through the sale of equipment such as generators, lawnmowers, and outboard motors. The company also earns from financial services, providing financing solutions for the purchase of its vehicles, and has strategic partnerships and joint ventures, particularly in the areas of electric vehicles and autonomous driving technologies, enhancing its product offerings and market reach.

Honda Motor Co Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q4-2025)
|
% Change Since: -7.29%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the motorcycle business and a strategic increase in dividends, but was overshadowed by significant challenges in the automobile segment, including tariff impacts and postponed investments. Overall, the sentiment is balanced with both positive and negative aspects having significant weight.
Q4-2025 Updates
Positive Updates
Record Operating Profit in Motorcycle Business
The motorcycle business achieved record highs in unit sales, operating profit, and operating profit margin, with an operating profit of JPY 663.4 billion, up by JPY 107.2 billion year-on-year.
Strong Operating Cash Flow
Operating cash flow after R&D adjustments remained high, reaching JPY 2.800 trillion, consistent with the previous fiscal year.
Dividend Increase
Honda announced a dividend policy change, increasing the annual dividend by JPY 2 from JPY 68 to JPY 70 per share.
Hybrid Electric Vehicle Sales Expansion
Hybrid EV sales expanded, particularly in North America, which contributed positively to the overall automobile business.
Negative Updates
Decline in Automobile Business Profit
The automobile business saw operating profit decline by JPY 189.1 billion year-on-year, impacted by a reduction in sales volume and increased incentives to boost EV sales.
Significant Impact of Tariff Policies
Tariff policies are expected to have a significant impact, with a projected JPY 650 billion impact, complicating the formulation of the financial outlook for the fiscal year ending March 2026.
Postponement of Canadian Investment
Due to a slower than expected growth in the North American EV market, the large-scale investment in Canada for EV production has been postponed for at least two years.
Decrease in Overall Net Profit
Net profit attributable to the owner of the parent decreased by JPY 271.3 billion, totaling JPY 835.8 billion.
Company Guidance
In the recent financial results call, Honda presented its fiscal year 2025 performance and provided guidance for fiscal year 2026. The operating profit for FYE March 2025 was JPY 1.213.4 trillion, with a one-time adjustment for automobile warranty provisions, bringing the figure to JPY 1.341 trillion. The motorcycle segment achieved record sales and profits, whereas the automobile segment faced challenges with declining sales in China and ASEAN, affected by increased EV incentives in North America. For FYE March 2026, Honda anticipates a minimum operating profit of JPY 500 billion and a net profit of JPY 250 billion, factoring in tariff policy impacts. Sales of hybrid EVs are expected to rise, especially in North America. Additionally, Honda plans to increase dividend payments from JPY 68 to JPY 70 per share and has repurchased JPY 589.5 billion worth of shares as part of a JPY 1.1 trillion buyback program. Honda is also reevaluating its electrification strategy due to the slowing growth of the EV market and has postponed a major investment in Canada for two years.

Honda Motor Co Financial Statement Overview

Summary
Honda Motor Co demonstrates strong revenue growth and stable financial health. However, the decrease in net profit margin and negative Free Cash Flow due to high capital expenditures indicate areas needing improvement.
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.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue21.69T20.43T16.91T14.55T13.17T
Gross Profit4.66T4.41T3.33T2.98T2.73T
EBITDA2.11T2.50T2.40T2.36T2.08T
Net Income835.84B1.11T651.42B707.07B657.42B
Balance Sheet
Total Assets30.78T29.77T24.67T23.97T21.92T
Cash, Cash Equivalents and Short-Term Investments4.53T5.18T4.07T3.89T3.05T
Total Debt11.45T10.08T7.67T8.10T7.72T
Total Liabilities18.15T16.77T13.12T13.20T12.55T
Stockholders Equity12.33T12.70T11.23T10.47T9.08T
Cash Flow
Free Cash Flow-218.65B138.61B1.50T1.23T521.24B
Operating Cash Flow292.15B747.28B2.13T1.68T1.07T
Investing Cash Flow-941.97B-867.27B-678.06B-376.06B-796.88B
Financing Cash Flow280.48B918.65B-1.47T-615.72B-283.98B

Honda Motor Co Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1380.00
Price Trends
50DMA
1423.56
Negative
100DMA
1402.88
Negative
200DMA
1411.11
Negative
Market Momentum
MACD
-6.74
Positive
RSI
41.30
Neutral
STOCH
14.34
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 1380 is below the 20-day moving average (MA) of 1414.03, below the 50-day MA of 1423.56, and below the 200-day MA of 1411.11, indicating a bearish trend. The MACD of -6.74 indicates Positive momentum. The RSI at 41.30 is Neutral, neither overbought nor oversold. The STOCH value of 14.34 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

Overall Rating
UnderperformOutperform
Sector (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$6.71T7.786.54%4.88%6.17%-21.69%
75
Outperform
¥32.11T6.8413.59%4.06%6.52%-1.47%
75
Outperform
$3.39T8.0315.02%2.43%8.39%55.79%
69
Neutral
$5.06T19.044.70%1.72%6.57%15.79%
68
Neutral
$1.80T5.3712.64%5.44%-0.37%-10.12%
67
Neutral
¥247.19B12.856.57%2.82%5.08%-11.28%
48
Neutral
$1.17T12.25-12.13%7.48%-0.41%-274.49%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:7267
Honda Motor Co
1,380.00
-303.19
-18.01%
JP:7203
Toyota Motor
2,456.50
-722.12
-22.72%
JP:6201
Toyota
16,300.00
2,907.70
21.71%
JP:7201
Nissan Motor Co
341.10
-211.30
-38.25%
JP:7269
Suzuki Motor
1,727.00
-65.33
-3.64%
JP:7270
SUBARU
2,480.00
-776.21
-23.84%

Honda Motor Co Corporate Events

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.

Honda Announces Progress in Share Buyback Program
May 7, 2025

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.

Honda Announces Executive Leadership Change
Apr 10, 2025

Honda Motor Co., Ltd. announced a planned change in its executive leadership, with Katsushi Inoue set to be appointed as a Director and Senior Managing Executive Officer following the upcoming Ordinary General Meeting of Shareholders in June 2025. This change reflects Honda’s strategic approach to strengthen its leadership team and potentially enhance its operational effectiveness and market positioning.

Honda Executive Resigns Amid Allegations, Company Pledges Compliance Overhaul
Apr 7, 2025

Honda Motor Co., Ltd. has announced the resignation of Shinji Aoyama, its Director, Executive Vice President, and Representative Executive Officer, following allegations of inappropriate conduct during a social gathering. The company has taken this matter seriously, with President Toshihiro Mibe voluntarily returning part of his compensation and emphasizing the restoration of trust and strengthening of compliance systems as top priorities.

Honda Announces Progress in Share Buyback Program
Apr 2, 2025

Honda Motor Co., Ltd. announced the acquisition of 62,915,200 shares of its own common stock, amounting to 91,225,041,103 yen, during March 2025. This move is part of a larger plan authorized by the Board of Directors to acquire up to 1,100,000,000 shares by the end of 2025, reflecting a strategic effort to enhance shareholder value and optimize capital structure.

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: Jun 24, 2025