S&P shifts Honda view to stable

S&P said it revised its outlook for the Honda Motor Co. to stable from negative and affirmed its A- ratings on the company and its subsidiaries.

“The outlook revision is based on our view that the Japan-based automaker's EBITDA margin will recover to 10% or above over the next one to two years. We forecast the margin will be backed by measures to increase the profitability of its automobile business, especially in its core market of North America. The merger of its manufacturing and research and development operations in North America in 2020 will likely increase its profitability on a full-year basis from fiscal 2021 (ends March 31, 2022),” S&P said in a press release.

The agency said it also sees Honda upping its operating efficiency by improving its production ratio through the closure of three plants in fiscal 2021.

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