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Companies Honda Motor

Honda Motor

Ticker7267 · TSE
Fiscal yearends March
Updated3 days ago · r1
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Honda's motorcycle, automobile, financial services and power products businesses through the write-off of its EV programmes and the recovery after it, with the three statements.

Summary by Your Analyst · r1

  • Honda earns from motorcycles, automobiles, financial services and power products. Revenue reached 21,796,610 JPY millions in FY2026, but writing off its EV programmes turned operating income to -414,346 JPY millions; with the EV-related losses added back, core operating profit was 1,039,254 JPY millions, against 1,213,486 JPY millions the year before.
  • The year in progress carries a record first quarter and the guided EV losses, for operating income of 1,057,563 JPY millions. From FY2028 costs run at FY2025's ratios on unit volumes growing 1 to 4 per cent a year, so operating income reaches 1,429,324 JPY millions, beside the company's own target of 1.4 trillion yen or more, and core NOPAT 1,038,439 JPY millions, a return on invested capital of 10.3%.
  • At a cost of equity of 7.9%, the enterprise DCF puts the equity at 12,829,925 JPY millions and residual operating income at 13,015,639 JPY millions, against a market capitalisation of 6,954,874 JPY millions. The difference rests mostly on the margin: the market price corresponds to a core margin near 2.5 per cent, below every year from FY2022 to FY2026, or to the equity-method and other investments counting for much less than their book.

Share price

—— today— 1M · — 1YMarket cap — · Net debt -1,456,352 · Equity 12,321,523 (JPY millions) · — shares
Market cap · monthlyRevenueNOPATEquityNet debtFY2028E · model
JPY millions-10,000,000010,000,00020,000,00030,000,000modelRevenue FY2025: 21,688,767 (JPY millions)NOPAT FY2025: 847,013 (JPY millions)Equity FY2025: 12,326,529 (JPY millions)Net debt FY2025: -2,349,023 (JPY millions)Revenue FY2026: 21,796,610 (JPY millions)NOPAT FY2026: 725,399 (JPY millions)Equity FY2026: 11,817,512 (JPY millions)Net debt FY2026: -2,433,590 (JPY millions)Revenue FY2027: 24,771,010 (JPY millions)NOPAT FY2027: 1,101,139 (JPY millions)Equity FY2027: 12,321,523 (JPY millions)Net debt FY2027: -1,456,352 (JPY millions)Revenue FY2028E: 25,163,299 (JPY millions)NOPAT FY2028E: 981,980 (JPY millions)Equity FY2028E: 12,745,761 (JPY millions)Net debt FY2028E: -1,434,095 (JPY millions)FY2025FY2026FY2027FY2028E
Market figures, JPY millions
ItemFY2025FY2026FY2027FY2028E
Revenue21,688,76721,796,61024,771,01025,163,299
NOPAT847,013725,3991,101,139981,980
Equity12,326,52911,817,51212,321,52312,745,761
Net debt-2,349,023-2,433,590-1,456,352-1,434,095

Price vs model value

market cap vs the model’s equity value · r1
Enterprise DCFlow → highpoint = baseEquity value, JPY tnat FY2027¥9.19tn¥15.7tn¥12.8tnResidual operatin…Residual operating incomelow → highpoint = base¥8.66tn¥16.5tn¥13.0tnmarket cap ¥6.95tn0¥5tn¥10tn¥15tn¥20tn

DCF against the market 84.5% (tolerance 15.0%). the core operating margin of 5.6 per cent from FY2028 (FY2025's cost ratios: Cost of sales ratio 78.5 per cent), then the equity-method and other investments added at book: beyond the tolerance: the assumption behind it is the core operating margin of 5.6 per cent from FY2028 (FY2025's cost ratios); each point of margin moves the DCF equity value by roughly 1.9 trillion yen, so a margin near 2.5 per cent, below every year of FY2022 to FY2026 (4.6 to 6.8 per cent), would close the gap. The second is the 2.6 trillion yen of equity-method and other investments added at book: valued at nothing they close about 40 per cent of it. The market-implied WACC of about 25 per cent, the steady-state reading, stands against the model's 9.5; core ROIC ran 7.7 to 12.7 per cent o

Residual income against the market 87.1% (tolerance 15.0%). the core operating margin of 5.6 per cent from FY2028 (FY2025's cost ratios), with the investments added at book: beyond the tolerance, for the DCF's reason: at the 5.6 per cent margin core NOPAT of about 1.0 trillion yen a year clears the WACC charge on invested capital of about 8.6 trillion, where the market's enterprise value of about 3.2 trillion sits far below that capital; a margin near 2.5 per cent, or the investments at nothing with a margin near 4 per cent, would close the gap

What if

Moving a driver re-runs the model; that opens shortly. The sliders show the Official’s own values.
FY2028 Operating income · JPY millions
Cost of sales ratioCost of sales ratio from FY2028
DownsideBaseUpside
78.5%
Motorcycle unit growth, FY2028Motorcycle units, growth factor in FY2028
DownsideBaseUpside
104.0%
Automobile unit growthAutomobile units, growth factor from FY2028
DownsideBaseUpside
101.0%
Capital expenditure ratioCapital expenditure, share of revenue from FY2028
DownsideBaseUpside
3.5%

The model

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Profit & loss
P&L, FY2028E · model · JPY millions
Revenue25,163,299
Operating expenses23,756,451
Operating income1,406,849
Profit before tax1,547,889
Income tax expense487,056
Profit for the year1,060,833
Profit attributable to non-controlling interests79,396
Profit attributable to owners of the parent981,437
JPY millionsFY2025FY2026FY2027FY2028E
Profit & loss
Revenue21,688,76721,796,61024,771,01025,163,299
Operating expenses20,475,28122,210,95623,713,44723,756,451
Operating income1,213,486-414,3461,057,5631,406,849
Profit before tax1,317,640-403,3001,247,0821,547,889
Income tax expense414,606-50,277392,404487,056
Profit for the year903,034-353,023854,6781,060,833
Profit attributable to non-controlling interests67,19770,91877,80779,396
Profit attributable to owners of the parent835,837-423,941776,871981,437
Read-only · Your Analyst · r1Reported FY2025–FY2027 · Forecast FY2028E · All years
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