Results: Honda Motor Co., Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

Honda Motor Co., Ltd. (TSE:7267) shareholders are probably feeling a little disappointed, since its shares fell 2.1% to JP¥1,660 in the week after its latest yearly results. The result was positive overall - although revenues of JP¥20t were in line with what the analysts predicted, Honda Motor surprised by delivering a statutory profit of JP¥226 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Honda Motor

Following the latest results, Honda Motor's 17 analysts are now forecasting revenues of JP¥21t in 2025. This would be an okay 4.0% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be JP¥229, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of JP¥21t and earnings per share (EPS) of JP¥227 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at JP¥1,976. 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¥2,400 per share, while the most bearish prices it at JP¥1,300. 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.

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. We would highlight that Honda Motor's revenue growth is expected to slow, with the forecast 4.0% annualised growth rate until the end of 2025 being well below the historical 5.4% p.a. growth over the last five years. Compare this to the 10 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 3.4% per year. So it's pretty clear that, while Honda Motor's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 in mind, we wouldn't be too quick to come to a conclusion on Honda Motor. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Honda Motor going out to 2027, and you can see them free on our platform here..

Even so, be aware that Honda Motor is showing 1 warning sign in our investment analysis , you should know about...

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com