Honda Motor Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Shareholders might have noticed that Honda Motor Co., Ltd. (TSE:7267) filed its yearly result this time last week. The early response was not positive, with shares down 2.7% to JP¥1,404 in the past week. Revenues were in line with forecasts, at JP¥22t, although statutory earnings per share came in 14% below what the analysts expected, at JP¥179 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

We've discovered 2 warning signs about Honda Motor. View them for free.

Following last week's earnings report, Honda Motor's 16 analysts are forecasting 2026 revenues to be JP¥22t, approximately in line with the last 12 months. Statutory per-share earnings are expected to be JP¥199, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥22t and earnings per share (EPS) of JP¥217 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

View our latest analysis for Honda Motor

It might be a surprise to learn that the consensus price target was broadly unchanged at JP¥1,672, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Honda Motor, with the most bullish analyst valuing it at JP¥2,100 and the most bearish at JP¥1,250 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Honda Motor shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. 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 2026 expected to display 0.7% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 2.7% annually. Factoring in the forecast slowdown in growth, it seems obvious that Honda Motor is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Honda Motor. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Honda Motor's revenue is expected to perform worse 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Honda Motor analysts - going out to 2028, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Honda Motor (1 is a bit unpleasant!) that you need to be mindful of.

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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.