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Honda Motor Co Ltd ADR HMC

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Morningstar’s Analysis

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5-Star Price

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Honda Starts Fiscal 2022 With a Guidance Raise

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.

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Company Profile

Business Description

Incorporated in 1948, Honda Motor was originally a motorcycle manufacturer. Today, the firm makes automobiles, motorcycles, and power products such as boat engines, generators, and lawnmowers. Honda sold 19.7 million cars and motorcycles in fiscal 2021 (4.5 million of which were autos), and consolidated sales were JPY 13.2 trillion. Automobiles constitute 65% of revenue and motorcycles 14%, with the rest split between power products and financial services. Honda also makes robots and private jets.

Contact
Number 1-1, Minami-Aoyama 2-chome, Minato-ku
Tokyo, 107-8556, Japan
T +81 334231111
Sector Consumer Cyclical
Industry Auto Manufacturers
Most Recent Earnings Jun 30, 2021
Fiscal Year End Mar 31, 2022
Stock Type
Employees 211,374

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