Honda Motor Co Ltd (HMC)

Price$31.62Cached quoteAs of 2026-09-10 16:17 UTC

AI: Undervalued

Price checkThe shares look inexpensive if Honda returns near its normal earning power.

Honda's latest forecast implies about 103 yen of earnings per Japanese share for the year ending March 2027, depressed by restructuring costs. Each U.S. depositary receipt represents three Japanese shares. Using management's 155-yen-per-dollar exchange assumption, the market price is roughly sixteen times that reported forecast, but closer to about eleven times Honda's adjusted earnings estimate before major restructuring charges. That discount looks attractive if the costly electric-vehicle reset is genuinely temporary, although the valuation is less compelling if weak automobile profits persist.

Big pictureHonda remains profitable across cycles, but recent cash generation has become much less dependable.

The supplied financial history shows revenue rising from 14.9 trillion yen in fiscal 2020 to 21.7 trillion yen in fiscal 2025, while net income stayed positive through that period. However, operating cash flow fell sharply to 292 billion yen in fiscal 2025 from 2.13 trillion yen two years earlier, while capital spending rose to 511 billion yen. Fiscal 2026 then produced a 424 billion yen net loss after large electric-vehicle restructuring charges. The long record supports durable earning capacity, but recent cash weakness makes normalized profits an assumption rather than a certainty.

Business strengthA large equity base and aggressive buybacks provide support, despite substantial reported debt.

At March 2025 Honda had 12.3 trillion yen of shareholder equity and 4.5 trillion yen of cash, against 18.1 trillion yen of total liabilities. Reported debt was 11.5 trillion yen, but Honda's financing business makes headline automotive-style debt comparisons less informative because loans and leases are funded with borrowing. Capital returns have been unusually large: Honda bought back 722 billion yen of shares in fiscal 2025 and later completed roughly 1.1 trillion yen of additional purchases. Those repurchases reduce dilution and can materially lift each remaining shareholder's claim on future earnings.

What could change the storyThe valuation works best if auto profits recover while China losses and restructuring costs fade.

The strongest bull case is Honda's August forecast upgrade: first-quarter operating profit reached 530.8 billion yen, and management raised full-year operating profit guidance to 650 billion yen. The strongest bear case is structural automobile weakness, especially China, where recent vehicle sales have fallen sharply as local electric brands gain share. Honda also expects about 520 billion yen of restructuring charges this year. A sustained recovery toward management's longer-term 1.4 trillion yen operating-profit goal would make today's valuation look cheap; continued China erosion or repeated restructuring would justify the discount.

AI: News

Profit forecast raisedHonda lifted its annual outlook after quarterly profit rebounded far more strongly than analysts expected.

On August 5, Honda reported April-June operating profit of 530.8 billion yen, more than double the prior-year level and well above the analyst consensus cited by Reuters. Management raised its full-year operating-profit forecast by 30% to 650 billion yen and lifted expected parent-company profit to 400 billion yen. A weaker yen and the absence of earlier tariff expenses helped. This matters because it supports the view that underlying earning power is recovering, though restructuring costs remain substantial.

Leadership dispute surfacedA reported internal challenge to Honda's chief executive highlighted concern over automobile and electric-vehicle strategy.

Reuters reported on June 9 that former senior Honda executives had sought the removal of chief executive Toshihiro Mibe, criticizing strategic setbacks in China and electric vehicles. The board continued to support him. The episode does not itself prove weaker future earnings, but it makes execution risk more concrete: Honda is simultaneously restructuring its automobile operations, cutting electric-vehicle commitments and trying to restore competitiveness in China. Persistent internal disagreement could slow those changes, while successful restructuring would reduce that concern.

Electric strategy resetHonda suspended a major Canadian electric-vehicle project and redirected resources toward a more flexible product mix.

On May 14, Honda indefinitely suspended its planned comprehensive electric-vehicle value chain in Ontario after previously delaying it. Management also outlined a three-year automobile restructuring plan, targeting roughly 20% better production efficiency over five years and more reliance on external battery resources. The decision followed heavy electric-vehicle-related losses in fiscal 2026. The reset may protect future cash by avoiding poorly timed investment, but it also acknowledges that earlier electrification assumptions were too optimistic and leaves Honda needing a competitive long-term electric strategy.

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Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2013	2012	2011	2010	2009	2008	2007
Revenue	¥21.80T	¥21.69T	¥20.43T	¥16.91T	¥14.55T	¥13.17T	¥14.93T	¥15.89T	¥15.36T	¥14.00T	¥14.60T	¥11.84T	¥9.88T	¥7.95T	¥8.94T	¥8.58T	¥10.01T	¥12.00T
Gross profit	¥3.60T	¥4.66T	¥4.41T	¥3.33T	¥2.98T	¥2.73T	¥3.08T	¥3.31T	¥3.36T	¥3.13T	¥3.27T	¥3.08T	¥2.53T	¥2.03T	¥2.44T	¥2.16T	¥2.59T	¥3.46T
Gross margin	16.53%	21.50%	21.60%	19.70%	20.51%	20.73%	20.62%	20.82%	21.88%	22.38%	22.39%	26.02%	25.64%	25.52%	27.30%	25.23%	25.89%	28.82%
Research & development	¥1.54T	¥1.10T	¥923.63B	¥880.91B	¥787.06B	¥738.89B	¥804.12B	¥806.90B	¥751.86B	¥691.43B	¥656.50B	¥634.13B	¥560.27B	¥519.82B	¥487.59B	¥463.35B	¥563.20B	¥587.96B
Operating expenses	¥4.02T	¥20.48T	¥19.05T	¥16.13T	¥13.68T	¥12.51T	¥14.30T	¥15.16T	¥14.53T	¥13.16T	¥14.10T	¥11.09T	¥9.33T	¥7.72T	¥8.37T	¥8.22T	¥9.82T	¥11.05T
Operating income	−¥414.35B	¥1.21T	¥1.38T	¥780.77B	¥871.23B	¥660.21B	¥633.64B	¥726.37B	¥833.56B	¥840.71B	¥503.38B	¥750.28B	¥544.81B	¥231.36B	¥569.77B	¥363.77B	¥189.64B	¥953.11B
Operating margin	−1.90%	5.59%	6.76%	4.62%	5.99%	5.01%	4.24%	4.57%	5.43%	6.01%	3.45%	6.34%	5.52%	2.91%	6.38%	4.24%	1.89%	7.94%
EBITDA	¥983.52B	¥2.83T	¥2.96T	¥2.38T	¥2.35T	¥2.09T	¥2.10T	¥2.20T	¥2.29T	¥2.18T	¥1.78T	¥1.55T	¥1.14T	¥786.23B	¥1.16T	¥993.45B	¥827.29B	—
EBITDA margin	4.51%	13.03%	14.50%	14.06%	16.14%	15.83%	14.03%	13.82%	14.89%	15.54%	12.20%	13.05%	11.49%	9.89%	12.97%	11.58%	8.26%	—
Net income	−¥423.94B	¥903.03B	¥1.18T	¥717.31B	¥760.70B	¥695.44B	¥509.93B	¥676.29B	¥1.13T	¥679.39B	¥406.36B	¥574.11B	¥367.15B	¥211.48B	¥534.09B	¥268.40B	¥137.00B	¥600.04B
Net profit margin	−1.94%	4.16%	5.79%	4.24%	5.23%	5.28%	3.42%	4.26%	7.35%	4.85%	2.78%	4.85%	3.72%	2.66%	5.98%	3.13%	1.37%	5.00%
Basic EPSper basic share	-¥318.18	¥178.93	¥225.88	¥128.01	¥137.03	¥380.75	¥260.13	¥345.99	¥590.79	¥342.10	¥191.16	¥318.54	¥203.71	¥117.34	¥295.67	¥147.91	¥75.50	¥330.54
Diluted EPSper diluted share	-¥318.18	¥178.93	¥225.88	¥128.01	¥137.03	¥380.75	¥260.13	¥345.99	¥590.79	¥342.10	¥191.16	—	—	—	—	—	—	—

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

View holders

Top 20 reported holders of HMC
Holder	Shares held
Fisher Asset Management, LLC	7.82M
DONALD SMITH & CO., INC.	4.04M
BANK OF AMERICA CORP /DE/	3.2M
MORGAN STANLEY	2.91M
BlackRock, Inc.	2.66M
GOLDMAN SACHS GROUP INC	2.1M
FMR LLC	1.89M
MILLENNIUM MANAGEMENT LLC	1.58M
DV EQUITIES, LLC	1.52M
BRANDES INVESTMENT PARTNERS, LP	1.41M
FIRST TRUST ADVISORS LP	1.23M
DIMENSIONAL FUND ADVISORS LP	1.22M
AMERICAN CENTURY COMPANIES INC	1.17M
Connor, Clark & Lunn Investment Management Ltd.	1.07M
D. E. Shaw & Co., Inc.	1.06M
CITADEL ADVISORS LLC	1.05M
UBS Group AG	996.67K
Grantham, Mayo, Van Otterloo & Co. LLC	942.44K
NORTHERN TRUST CORP	857.07K
JPMORGAN CHASE & CO	648.14K

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

Review ownership filings at SEC.gov ↗

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