Honda Motor (NYSE:HMC) Shares Gap Down on Disappointing Earnings

Key Points

• Honda shares fell after quarterly EPS came in at $0.32, well below the $0.95 analyst consensus.
• Revenue increased about 13% year over year to $39.1 billion and beat forecasts, but rising costs weighed on operating profit and net income.
• Honda raised its FY2027 profit outlook, citing strong North American demand and a weaker yen, and plans a $3 billion Ohio hybrid-focused plant expected to begin production in 2029.

Honda Motor Co., Ltd. (NYSE:HMC - Get Free Report) shares gapped down prior to trading on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $34.88, but opened at $33.38. Honda Motor shares last traded at $33.0750, with a volume of 319,092 shares changing hands.

The company reported $0.32 earnings per share for the quarter, missing analysts' consensus estimates of $0.95 by ($0.63). Honda Motor had a negative net margin of 0.73% and a negative return on equity of 1.30%. The business had revenue of $39.13 billion during the quarter, compared to analyst estimates of $36.68 billion.

Key Headlines Impacting Honda Motor

These are some of the HMC headlines that stood out recently:

• Positive Sentiment: Honda raised its FY2027 profit outlook after first-half profit growth. Strong North American vehicle demand and a weaker yen helped overseas earnings, supporting the improved forecast despite EV restructuring costs and weakness in China. Honda Raises Guidance After First-Half Profit Growth
• Positive Sentiment: Honda plans to invest $3 billion in a new Ohio assembly plant focused on hybrids. Expected to start production in 2029, the 240,000-vehicle-a-year facility would lift U.S. production capacity to about 1.3 million vehicles annually and create more than 2,000 jobs. The investment could strengthen Honda’s hybrid capacity, though its benefits are longer term. Honda to build new $3 billion auto plant in Ohio, adding 2,000 jobs
• Negative Sentiment: Quarterly revenue rose about 13% year over year to $39.1 billion and exceeded analyst expectations, but profitability weakened as costs climbed. Operating profit and net income fell, and reported EPS of $0.32 missed the $0.95 consensus estimate—an earnings setback that could offset the improved outlook. Honda Motor quarterly earnings results

Wall Street Analysts Forecast Growth

Several research analysts have issued reports on the company. Weiss Ratings raised Honda Motor from a "sell (d)" rating to a "sell (d+)" rating in a report on Thursday, October 22nd. BNP Paribas Exane assumed coverage on Honda Motor in a research report on Friday, September 18th. They set a "neutral" rating and a $34.00 price objective for the company. Wall Street Zen raised Honda Motor from a "hold" rating to a "buy" rating in a research note on Saturday, September 19th. Finally, Zacks Research upgraded Honda Motor from a "hold" rating to a "strong-buy" rating in a report on Monday, August 17th. Two investment analysts have rated the stock with a Strong Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, the company has an average rating of "Moderate Buy" and a consensus price target of $34.00.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in the company. Private Advisor Group LLC acquired a new position in Honda Motor in the 3rd quarter worth approximately $420,000. Ieq Capital LLC lifted its holdings in shares of Honda Motor by 40.5% in the third quarter. Ieq Capital LLC now owns 26,361 shares of the company's stock valued at $833,000 after purchasing an additional 7,598 shares in the last quarter. Independent Advisor Alliance lifted its holdings in shares of Honda Motor by 20.3% in the third quarter. Independent Advisor Alliance now owns 15,200 shares of the company's stock valued at $480,000 after purchasing an additional 2,568 shares in the last quarter. Global Retirement Partners LLC boosted its position in shares of Honda Motor by 23.0% in the third quarter. Global Retirement Partners LLC now owns 15,690 shares of the company's stock worth $496,000 after buying an additional 2,931 shares during the period. Finally, HighTower Advisors LLC boosted its position in shares of Honda Motor by 17.0% in the third quarter. HighTower Advisors LLC now owns 39,555 shares of the company's stock worth $1,250,000 after buying an additional 5,753 shares during the period. 5.32% of the stock is currently owned by institutional investors and hedge funds.

Honda Motor Trading Down 5.0%

The company has a quick ratio of 1.04, a current ratio of 1.29 and a debt-to-equity ratio of 0.69. The firm has a market cap of $51.71 billion, a price-to-earnings ratio of -47.33 and a beta of 0.48. The company has a 50-day moving average price of $33.11 and a 200 day moving average price of $29.09.

Honda Motor Company Profile

Honda Motor Co., Ltd. is a Japan-based manufacturer of automobiles, motorcycles and other mobility products. Its vehicle lineup includes passenger cars, SUVs and electrified models, while its motorcycle business serves consumers and commercial users in markets around the world. The company also makes power equipment, marine engines and other products, and provides financial services that support vehicle and equipment sales. Honda's aviation subsidiary, Honda Aircraft Company, develops and manufactures the HondaJet business aircraft.

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