Analyst Note| David Whiston, CFA, CPA, CFE |
Honda started fiscal 2022 with a good quarter that gives us no reason to change our fair value estimates. Diluted EPS of JPY 128.87 beat the Refinitiv consensus of JPY 64.13 and management raised fiscal 2022 guidance based on cost-cutting measures and improved contribution from foreign currency. Operating profit is now guided to JPY 780 billion instead of JPY 660 billion, with currency impacts from unspecified nations making up JPY 48 billion of the increase. New guidance assumes a full-year average exchange rate of JPY 106 to the dollar which means upside to this guidance remains should the spot rate remain at just below JPY 110 or weaker. Management also maintained fiscal 2022 dividend guidance at JPY 110 per share.