Results: Honda Motor Co., Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts
Honda Motor Co., Ltd. (TSE:7267) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 4.0% to hit JP¥6.1t. Honda Motor also reported a statutory profit of JP¥116, which was an impressive 75% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Honda Motor from 18 analysts is for revenues of JP¥23t in 2027. If met, it would imply a modest 4.4% increase on its revenue over the past 12 months. Earnings are expected to improve, with Honda Motor forecast to report a statutory profit of JP¥133 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥23t and earnings per share (EPS) of JP¥115 in 2027. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.
Check out our latest analysis for Honda Motor
There's been no major changes to the consensus price target of JP¥1,647, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Honda Motor at JP¥2,000 per share, while the most bearish prices it at JP¥1,400. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Honda Motor's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 5.8% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.2% annually. Even after the forecast slowdown in growth, it seems obvious that Honda Motor is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Honda Motor following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Honda Motor going out to 2029, and you can see them free on our platform here.
It is also worth noting that we have found 2 warning signs for Honda Motor that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.