Honda: Dialing Back EV Investments

Valkyrie Trading SocietyInvesting Group LeaderFollow5ShareSavePlay(6min)CommentsSummaryHonda faces profitability headwinds from tariffs and EV-related impairments in the dial-back, but adjusted profits and free cash flow are improving due to pricing and cost control.HMC is dialing back EV investment and likely R&D, supporting stronger forward free cash flow and potentially lower headline expenses. It's not all bad.A weaker yen could enhance export competitiveness and profit margins, though promotional pressures and demand risks persist, especially in Asia and maybe emerging in the US.Cautious on automotive exposure given economic uncertainties and prefer not to index to the sector.Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More » Artistic Operations/iStock Editorial via Getty Images When we last covered Honda (HMC) (HNDAF) the focus was on the Mexican footprint and the tariff risk. That risk has, of course, materialised to some extent, resulting in some hundreds ofThis article was written byValkyrie Trading Society5.5K FollowersFollowThe Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.