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Honda Motor Co Ltd ADR HMC

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Honda Sees More Damage Than It Expected From the Chip Shortage

Analyst Note

| David Whiston, CFA, CPA, CFE |

Honda’s fiscal 2022 second quarter showed more semiconductor shortage problems than rival Toyota. We are leaving our U.S. dollar fair value estimate in place and raising our yen fair value estimate to JPY 4,100 from JPY 4,000 on the time value of money and a weaker yen forecast over our five-year explicit forecast period. A weaker yen spot rate against the dollar negates these benefits when our yen fair value estimate is translated into dollars. We now translate the yen fair value at JPY 113.46 to the dollar instead of JPY 109.46.

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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.

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 Sep 30, 2021
Fiscal Year End Mar 31, 2022
Stock Type
Employees 211,374