Morgan Stanley expects Honda's stock price to decline further due to concerns over the outlook for losses in electric vehicles.

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Investing.com - Morgan Stanley believes that Honda’s stock will face greater downside pressure due to its electric vehicle losses exceeding expectations and the lowered guidance.

The investment bank stated that Honda’s stock is expected to underperform the Japanese stock market index over the next 15 days. Morgan Stanley estimates a 70% to 80% probability for this scenario.

Honda disclosed an additional EV-related loss of up to ¥2.5 trillion, including approximately ¥1.7 trillion in cash outflows. Morgan Stanley said this figure is above expectations and may continue to weigh on the stock price in the short term.

The automaker announced it will maintain a dividend of ¥70 per share for fiscal year 2026. Honda also stated it hopes to keep the same dividend level in fiscal year 2027.

Morgan Stanley noted that the dividend yield should provide some downside support for the stock price. The bank’s bearish outlook is mainly due to the company’s lowered forecasts and guidance.

This article was translated with the assistance of artificial intelligence. For more information, please see our Terms of Use.

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