2 Vehicle Manufacturer Stocks to Watch: Honda and REV Group

"The culprit is a messy EV unwind. Honda took $1.76 billion in EV-related charges during the nine-month period, covering impairments on cancelled models and onerous contract provisions tied to an alliance agreement. The company has now cut its 2030 global EV sales ratio target from 30% to 20%, a significant strategic retreat driven by slowing EV demand in North America and Europe, the end of U.S. EV tax incentives, and brutal competition from Chinese manufacturers."

"The bright spot is motorcycles. The motorcycle segment generated $18.44 billion in revenue over nine months with growing profitability. Honda is the world's largest motorcycle manufacturer by volume, with real pricing power in emerging markets where two-wheelers are essential transportation."

"Full-year FY2026 guidance tells the rest of the story. Honda now expects operating profit to fall 54.7% year-over-year and net profit to owners to drop 64.1%. Full-year EPS is guided at approximately $0.47, below the analyst consensus of $0.52."

Honda Motor reports significant financial deterioration through December 2025, with sales revenue down 2.2% year-over-year and operating profit collapsing 48.1% to $3.72 billion. The automobile segment shifted from a $2.53 billion profit to a $1.05 billion loss, driven by an expensive EV unwind involving $1.76 billion in charges for cancelled models and contract provisions. The company reduced its 2030 global EV sales target from 30% to 20%, citing weak North American and European demand, expired U.S. tax incentives, and intense Chinese competition. Full-year FY2026 guidance projects operating profit down 54.7% and net profit down 64.1%, with EPS guidance at $0.47 versus $0.52 consensus. The motorcycle segment provides a bright spot, generating $18.44 billion in revenue with growing profitability, leveraging Honda's position as the world's largest motorcycle manufacturer by volume.

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