Honda Motor Co., Ltd. Just Missed EPS By 31%: Here's What Analysts Think Will Happen Next

Honda Motor Co., Ltd. (TSE:7267) shareholders are probably feeling a little disappointed, since its shares fell 9.4% to JP¥1,382 in the week after its latest half-yearly results. Statutory earnings per share fell badly short of expectations, coming in at JP¥103, some 31% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at JP¥11t. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Honda Motor after the latest results.

View our latest analysis for Honda Motor

Taking into account the latest results, Honda Motor's 16 analysts currently expect revenues in 2025 to be JP¥21t, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 4.0% to JP¥221. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥21t and earnings per share (EPS) of JP¥222 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥1,832. 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. The most optimistic Honda Motor analyst has a price target of JP¥2,100 per share, while the most pessimistic values it at JP¥1,400. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 3.0% annualised decline to the end of 2025. That is a notable change from historical growth of 8.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.6% per year. It's pretty clear that Honda Motor's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Honda Motor analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Honda Motor (1 is a bit concerning) you should be aware 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.