Honda Motor Co., Ltd. (HMC) AI Stock Analysis

Honda Motor Co., Ltd. is a global company that develops, manufactures, and distributes motorcycles, automobiles, power products, and other technologies. Established in 1946 and headquartered in Tokyo, Japan, it operates across four primary segments: Motorcycle Business, Automobile Business, Financial Services Business, and Life Creation and Other Businesses. The motorcycle division produces sports, commuter, and off-road vehicles. The automobile segment builds passenger cars, light trucks, and mini vehicles. Financial Services offers customer leasing, retail lending, and wholesale financing for dealers. Its Life Creation segment produces power products including engines, generators, lawn mowers, and marine engines, as well as HondaJet aircraft.

Between FY2021 and FY2026, revenue generated a 5-year CAGR of 10.6%, rising from $14.55T in FY2022 to $21.80T in FY2026. However, annual revenue growth decelerated to 0.5% in FY2026, when operating margin fell to -1.9% and net income dropped to -$423.94B. Gross margin also compressed from 21.5% in FY2025 to 16.5% in FY2026, while R&D expenses expanded to $1.54T. In the latest quarter ended June 30, 2026, quarterly revenue grew 13.5% year-over-year, and quarterly earnings grew 147.5%, lifting trailing twelve-month revenue to $22.52T.

As of June 30, 2026, cash and short-term investments totaled $5.07T against total debt of $13.97T, resulting in net debt of $8.91T. Shareholders' equity stood at $11.82T, yielding a debt-to-equity ratio of 1.18 and a current ratio of 1.28. Total assets were $33.51T. During FY2026, Honda generated $1.14T in operating cash flow and $237.72B in free cash flow. Capital expenditures absorbed $897.54B, while capital returns included $670.27B in share buybacks and $284.39B in dividends paid, contributing to an 18.4% share count reduction over 5 years.

HMC carries an enterprise value of $39.03B and a market cap of $44.48B. The stock trades at a forward P/E of 24.6x, which is above the 14.1x median of its US-listed Consumer Cyclical peers. Its EV to EBITDA stands at 4.7x compared to the peer median of 11.1x, while its price-to-book ratio is 0.5x. Over the past year, the stock returned 15.0%, trailing the 16.8% return of the S&P 500 (SPY). Over a 5-year span, the stock returned 33.8% versus 83.0% for the S&P 500.

Honda pays a semiannual dividend with an annualized forward payout of $1.33 per share, representing a 3.88% dividend yield. The payout ratio stands at 55.7%. The company has paid consecutive dividends for 43 years and achieved a 5-year annualized dividend growth rate of 17.2%. The last ex-dividend date occurred on March 30, 2026.

Wall Street coverage includes 3 ratings: 1 Strong Buy, 0 Buy, and 2 Hold recommendations. The mean price target is $33.27, representing a 3.0% decline from the last close of $34.28. For the fiscal year ending March 31, 2027, consensus estimates project EPS of $2.81 on revenue of $23.68T. For the following fiscal year, 2 analysts expect EPS of $4.10 and revenue of $24.17T. Honda beat EPS estimates in 2 of the last 4 quarters, and its next earnings date is November 6, 2026.

This page is an AI-written research summary of Honda Motor Co., Ltd. (HMC). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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