Autos Sector: Significant divergence between fundamentals and share prices; fine-tune earnings forecasts again; key watchpoints in 1Q results

Research evidence excerpt

Autos Sector: Significant divergence between fundamentals and share prices; fine-tune earnings forecasts again; key watchpoints in 1Q results

J P M O R G A N Asia Pacific Equity Research

30 June 2026

Autos Sector

Significant divergence between fundamentals and

share prices; fine-tune earnings forecasts again; key

watchpoints in 1Q results

Although cyclical value auto stocks continue to underperform in the AI-driven Japan Equity Research

market, we see a significant divergence between their solid fundamentals and share

Autos & Auto Parts

prices. We had already revised our earnings forecasts for autos as of June 3 (link),

but change them again after reviewing our assumptions of an exchange rate at Akira Kishimoto AC

¥160/$ from July onward and sales volumes in major countries. Despite raw (81-3) 6736-8646

akira.x.kishimoto@jpmorgan.com

material inflation, company earnings seem resilient, including strong earnings in

Wencong Zhang

HEVs. We maintain our view that the sector has bottomed out. With emerging (81-3) 6736-8627

country risks receding and scope for a re-rating of their solid fundamentals, we take wencong.zhang@jpmorgan.com

a more bullish stance on Isuzu Motors and Suzuki Motor. We expect Toyota Motor JPMorgan Securities Japan Co., Ltd.

to update its capital policy and raise guidance with 2Q results. Below, we

summarize the key points to watch in each company's April-June results.

• J3 (Toyota, Honda, Nissan): We expect brisk earnings at Honda Motor and

Toyota Motor in 1Q. In light of Honda Motor's strong US sales (April-May:

+4.8% YoY), reduced incentives and robust motorcycle business (ASEAN,

India, Brazil), we forecast 1Q operating profit of ¥298.5 billion (+22.3% YoY),

and see a high likelihood of an upward revision to guidance. For Toyota Motor,