Honda Motor HMC
Japanese manufacturer of automobiles and motorcycles, with global revenue and exposure to economic cycles. Honda trades at a forward P/E of 6.64 and a dividend yield of 4.04%, but its financial health is weak (Net Debt/EBITDA of 6.92) and the 147.5% earnings growth is not sustainable in an environment of rising rates and falling vehicle demand in the US.
Detailed metrics
Market and fundamental data as of the analysis date.
Full AI report
Generated automatically from the metrics, the macro context and the company's news.
Japanese manufacturer of automobiles and motorcycles, with global revenue and exposure to economic cycles. Honda trades at a forward P/E of 6.64 and a dividend yield of 4.04%, but its financial health is weak (Net Debt/EBITDA of 6.92) and the 147.5% earnings growth is not sustainable in an environment of rising rates and falling vehicle demand in the US.
Score by category
| Category | Score |
|---|---|
| Financial health | 2.9 |
| Quality / Moat | 2.7 |
| Valuation | 5.0 |
| Growth | 7.2 |
| Dividend | 8.1 |
| Momentum | 4.9 |
| Risk & Context | 8.6 |
OVERALL SCORE: 5.2/10
Context and risks
Rising US interest rates (10-year yield at 5.17%) increase the cost of vehicle financing, which could pressure auto demand in its main market. Additionally, a weak yen (DXY at 101.09) is a positive for export competitiveness but does not offset demand risks.
News considered in the analysis
- Honda Motor Eyes First New North American Factory in Nearly 20 Years With $2.5 Billion Ohio Hybrid Plant: Report — La inversión de 2.500 millones en una nueva planta en Ohio es una señal de confianza en la demanda de híbridos en Norteamérica, pero es una noticia de medio plazo y su probabilidad es incierta.
- Cadence Design Systems (CDNS) Unveils AI RTL Generation Agent — Noticia de un competidor (Cadence) en el sector de software de diseño de chips, sin impacto directo en el negocio de automoción de Honda.
- Is ChargePoint (CHPT) Stock Outpacing Its Auto-Tires-Trucks Peers This Year? — Artículo de Zacks sobre ChargePoint, un competidor en infraestructura de carga, sin impacto directo en Honda.
- GM, Ford Q3 US New Vehicle Sales Seen Dropping YOY, Cox Says — La caída prevista de las ventas de vehículos nuevos en EE. UU. en el tercer trimestre es un viento en contra para todo el sector, incluido Honda, aunque la noticia se centra en GM y Ford.
- Honda considering new Ohio assembly plant, media reports say — Confirmación de los rumores sobre una nueva planta en Ohio, con implicaciones positivas para la capacidad de producción y la reducción de costes logísticos en Norteamérica.
Verdict: Hold: the stock is cheap, but high debt and an adverse macro environment limit upside potential in the short term.
Main risk: High debt (ND/EBITDA of 6.92) combined with rising US interest rates and a potential decline in vehicle demand in its main market.
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