Toyota, Honda, Nissan and Suzuki: FY2026 Full-Year and FY2027 Q1 Comparative Analysis

This article provides a comparative analysis of Toyota Motor Corporation (7203), Honda Motor Co., Ltd. (7267), Nissan Motor Co., Ltd. (7201), and Suzuki Motor Corporation (7269), covering FY2026 full-year results and FY2027 first-quarter (Q1) results. The analysis uses only earnings releases and XBRL data published on TDnet. Stock-price metrics, unit volumes, exchange rates, and regional breakdowns are not covered because they are not included in the source data.

The conclusion is clear: FY2026 was a year in which revenue growth accompanied by earnings declines became the industry's common theme. Although the four companies' combined revenue increased year on year, operating income fell by 40%. The breakdown was far from uniform, with Honda falling into an operating loss, Nissan's operating income almost disappearing, Toyota's margin declining by more than three percentage points, and Suzuki maintaining high profitability. In FY2027 Q1, this dispersion reappeared as a difference in the pace of recovery.

1. Industry Trends Based on the Four-Company Total

First, an overview of the industry. The fiscal-year coverage of the source data differs by company: Toyota is covered from FY2024 onward, Nissan has missing FY2024 data, and Suzuki is covered from FY2023 onward. Accordingly, a complete four-company aggregate can be calculated only for FY2025 and FY2026. Only Honda has five consecutive years of full-year data, making it difficult to calculate a five-year industry-wide trend from the available data.

While revenue growth was limited to +2.9%, operating income declined by 40.0%. This is a typical cost-pressure environment in which sales growth fails to translate into earnings. Meanwhile, PP&E continued to increase, rising 8.4% on a three-company aggregate basis, indicating that investment has not stopped even as profits contracted. Depreciation & Amortization (D&A) was disclosed only for Suzuki in FY2023 and FY2024, so the four-company aggregate D&A and EBITDA Margin cannot be calculated from the available data.

2. Profitability Comparison — Different Sources of Revenue Growth

Over the past several years, all four companies had growth trajectories around the double-digit level, although Toyota's two-year CAGR was +6.0%. In FY2026, however, the companies diverged: Nissan shifted to declining revenue, Honda was essentially flat, while Toyota and Suzuki achieved revenue growth. In terms of earnings, Suzuki was the only company to maintain an Operating Profit Margin in the high single digits and achieve net-income growth.

Nissan is particularly noteworthy. Although it remained profitable at the operating level, with operating income of ¥5.80 billion, it recorded a pretax loss of ¥44.03 billion. This implies a loss of approximately ¥49.83 billion below operating income, suggesting that restructuring-related expenses, impairment losses, or similar items may have been recognized. In addition, despite a pretax loss, Nissan recorded income taxes of ¥8.62 billion, resulting in an Effective Tax Rate of -19.6%. Tax-related assessments, such as a reassessment of the recoverability of deferred tax assets, appear to have had an impact.

3. Deeper Analysis of Earnings Structure — The Gross-Margin Gap Was Decisive

• Toyota's figure is calculated by the author as Revenue minus cost of sales. Even deducting disclosed Selling, General & Administrative Expenses of ¥469.75 billion from gross profit does not reconcile to operating income. The SG&A tag therefore appears to capture only part of the relevant expenses, limiting the usefulness of cross-company comparisons.

Honda presents the clearest story. Operating income deteriorated from ¥121.34 billion in the prior year to a loss of ¥41.43 billion, a decline of ¥162.77 billion. The components can be decomposed as follows.

In other words, approximately 65% of the deterioration came from the decline in gross profit and approximately 27% from higher R&D Expenses. The R&D-to-Revenue Ratio increased from 5.1% to 7.1%, while R&D Expenses expanded from ¥78.70 billion in FY2022 to ¥154.06 billion in FY2026, representing a four-year CAGR of +18.3%. This suggests that upfront investment in electrification and software is clearly appearing in the income statement.

At the same time, the Gross Profit Margin declined by 5.0 percentage points, from 21.5% to 16.5%, so the possibility that temporary factors, such as expense recognition or quality-related costs, were included on the cost side cannot be ruled out.

Suzuki has a structure characterized by both a high Gross Profit Margin of 25.5% and a high SG&A ratio of 16.1%. The high SG&A ratio is likely related to the composition of costs associated with its sales network, although the available data do not identify the precise breakdown. Nissan's Gross Profit Margin of 12.8% compares with an SG&A ratio of 12.3%, meaning that nearly all gross profit is absorbed by SG&A. It therefore has the least room to absorb fixed costs.

4. Capital Expenditures and Capital Intensity

The PP&E-to-Total Assets Ratio was highest at Suzuki, at 27.2%, followed by Nissan at 22.9%, while Toyota stood at 16.2% and Honda at 9.5%. Toyota and Honda, however, have consolidated structures with substantial financial receivables, which likely inflate total assets and dilute the ratio. Toyota's total assets rose sharply to ¥105.5 trillion in FY2026, up 12.7% year on year.

Three asset movements stand out. First, Toyota's Right-of-Use Assets increased from ¥58.30 billion to ¥90.12 billion, approximately 1.5 times higher. Second, Honda's Intangible Assets declined by ¥34.13 billion, from ¥112.60 billion to ¥78.47 billion, potentially including valuation revisions exceeding amortization, such as impairment losses. Third, Suzuki's PP&E increased approximately 1.6 times, from ¥113.45 billion in FY2023 to ¥180.21 billion in FY2026, while Intangible Assets also rose sharply to ¥18.54 billion, confirming that the company has entered an investment phase. Its Capital Intensity was the lowest of the four companies at 6.3%, partly because revenue is growing rapidly.

5. Cash Flow Analysis — Toyota's Major Free Cash Flow Reversal

(Free Cash Flow = Operating Cash Flow + Investing Cash Flow. Dividends paid were not disclosed under the relevant tag by any of the four companies, and Total Shareholder Returns (cash) cannot be calculated for Toyota or Honda.)

The biggest change was at Toyota. Operating Cash Flow increased 48.0%, from ¥369.69 billion to ¥547.29 billion, while Investing Cash Flow outflows narrowed from ¥418.97 billion to ¥152.03 billion. As a result, Free Cash Flow improved from -¥49.28 billion to ¥395.26 billion, a reversal of approximately ¥4.45 trillion. Given that operating income declined, this improvement appears to have been driven not by earnings but by working capital and cash-flow movements related to financial receivables and investment securities. Capital Expenditures themselves increased to ¥605.97 billion, so the reduction in Investing Cash Flow was not caused by lower Capex.

Honda moved from two consecutive years of negative Free Cash Flow in FY2024 and FY2025 to positive Free Cash Flow of ¥28.30 billion, although Operating Cash Flow of ¥113.52 billion remained well below the ¥212.90 billion recorded in FY2023. Nissan posted negative Free Cash Flow for the second consecutive year in FY2025 and FY2026, while Financing Cash Flow was positive, indicating an inflow of external funding. Cash and cash equivalents declined by ¥38.61 billion, from ¥196.15 billion to ¥157.54 billion. Suzuki was the most stable, increasing Operating Cash Flow for four consecutive years, from ¥28.66 billion to ¥71.75 billion, while maintaining positive Free Cash Flow for the second consecutive year.

6. Capital Efficiency and Financial Soundness

Interest-bearing debt was disclosed only by Suzuki, at ¥74.85 billion, comprising current debt of ¥26.33 billion and non-current debt of ¥48.52 billion. Since cash balances were not disclosed, Net D/E cannot be calculated for any of the four companies. For reference, Suzuki's gross D/E was low at 0.22x, calculated as ¥74.85 billion ÷ ¥338.20 billion.

Suzuki led in capital efficiency with ROE of 13.8%, followed by Toyota at 10.1%. Toyota's ROE declined by 5.7 percentage points over two years, from 15.8% in FY2024, as lower net income and higher equity took effect simultaneously. The denominator increased 16.6% over two years, while the numerator declined 22.2%, with net income falling from ¥494.49 billion to ¥384.80 billion and equity increasing from ¥3,422.09 billion to ¥3,991.88 billion.

Suzuki's financial position was strongest, with an Equity Ratio of 51.0%, while Nissan's 24.2% was the weakest. Nissan's Equity Ratio declined by 5.0 percentage points from 29.2% in FY2023, as two consecutive years of losses eroded capital. Honda also declined from 42.6% in FY2024 to 35.3%, a decrease of 7.3 percentage points. In terms of Equity Method Income, Honda swung to a loss of ¥16.20 billion from income of ¥0.09 billion in FY2025, suggesting deteriorating performance at equity-method investees.

7. Per-Share Metrics and Dividend Policy

Honda's EPS decline from ¥409.87 to -¥106.06 reflects two factors: the stock split and the net loss. The correct comparison point is the split-adjusted FY2023 EPS of ¥136.62. Similarly, Suzuki's EPS increased from the adjusted ¥113.80 in FY2023 to ¥227.69 in FY2026, approximately doubling over three years at a CAGR of +26.0%. The dividend per share also increased from the adjusted ¥25.00 to ¥46.00.

The differences in dividend-policy characteristics are also clear. Despite declining earnings, Toyota raised its dividend from ¥90 to ¥95, increasing its Dividend Payout Ratio from 20.4% in FY2024 to 32.1%. DOE remained broadly stable at 3.2%, 3.4%, and 3.3%, suggesting a stable dividend policy based on net assets. Honda maintained a dividend of ¥70 even while reporting a net loss, with DOE at 2.4%, indicating a capital-based rather than earnings-linked dividend policy. Nissan paid no dividend in either FY2025 or FY2026.

Honda's BPS also increased from the adjusted ¥2,248.76 to ¥3,035.91 despite the net loss. Because equity attributable to owners declined from ¥1,269.69 billion in FY2024 to ¥1,181.75 billion, the increase appears to have resulted from a reduction in shares outstanding, potentially through Share Repurchases / Buybacks.

8. Earnings Forecasts and FY2027 Q1 Progress

(Amounts in ¥ billion. Progress = Q1 actual ÷ full-year forecast.)

The forecast levels themselves are also informative. Toyota set its operating-income forecast of ¥300.00 billion at 20.3% below its FY2026 actual result of ¥376.62 billion. Suzuki's forecast of ¥57.00 billion was also 8.5% below its actual result of ¥62.29 billion. By contrast, Nissan projects a recovery from ¥5.80 billion to ¥20.00 billion, while Honda forecasts a recovery from an operating loss to operating income of ¥50.00 billion.

The quality of Q1 earnings also differed. Toyota's operating-income progress was 35.4%, compared with net-income progress of 49.2%. Pretax income of ¥196.38 billion substantially exceeded operating income of ¥106.34 billion, aided by non-operating factors including Equity Method Income of ¥21.06 billion. Suzuki showed a similar pattern, with pretax income of ¥28.32 billion exceeding operating income of ¥15.80 billion by ¥12.52 billion.

By contrast, Nissan reported Q1 operating income of ¥7.78 billion, corresponding to an Operating Profit Margin of 2.6%, an improvement from 0.5% for FY2026 as a whole. However, net income was only ¥0.37 billion because income taxes of ¥3.24 billion substantially reduced pretax income of ¥4.07 billion. Nissan's Q1 Gross Profit Margin improved to 15.8%, up 3.0 percentage points from 12.8% for FY2026, suggesting that efforts to rebuild the cost structure have begun to take effect.

9. Key Issues to Monitor Going Forward — Qualitative Considerations

How electrification investment is reflected in earnings: Honda is the only company for which R&D Expenses are disclosed in the available data. However, the increase in its R&D-to-Revenue Ratio from 5.1% to 7.1% suggests that development costs in electrification and software have entered a stage in which they directly weigh on earnings. Similar investment may be under way at the other three companies, but their R&D amounts cannot be identified from the available data, making ratio comparisons difficult. Movements in Intangible Assets — Honda's ¥34.13 billion decline and Suzuki's increase to ¥18.54 billion — may reflect differences in the capitalization and valuation policies applied to development assets.

FX Impact: Quantitative assessment is not possible because specific exchange rates are not included in the source data. Nevertheless, all four companies have export-oriented structures with overseas sales, and the impact on yen-denominated revenue and costs may be asymmetric. The simultaneous increase in Toyota's and Honda's cost-of-sales ratios in FY2026 likely reflects multiple factors, including FX Impact, cost inflation, and temporary expenses.

Inventory trends: Inventory is one of the most important leading indicators to monitor. In FY2026, inventory-to-revenue ratios were 10.1% for Toyota, 11.6% for Honda, 8.1% for Nissan, and 11.0% for Suzuki. Toyota's inventory increased 11.7%, from ¥459.82 billion to ¥513.49 billion, exceeding its revenue growth of 5.5%, and expanded further to ¥546.98 billion in FY2027 Q1. Suzuki's inventory also increased approximately 1.6 times, from ¥43.70 billion in FY2024 to ¥69.26 billion, significantly outpacing revenue growth. This may reflect advance preparations for higher production and supply capacity, but if demand growth slows, it could turn into inventory-adjustment pressure. Inventory turnover trends in the next quarters therefore warrant close monitoring. Nissan's inventory declined from ¥100.42 billion to ¥97.69 billion, suggesting that inventory compression progressed in line with declining revenue.

10. Conclusion

What emerges from comparing the four companies side by side is that current resilience is determined not by scale but by profitability and the depth of the equity base. Suzuki, with an Operating Profit Margin of 9.9% and an Equity Ratio of 51.0%, and Nissan, with an Operating Profit Margin of 0.5% and an Equity Ratio of 24.2%, have vastly different ranges of strategic options even under the same cost environment.

In FY2027, the key financial checkpoints will be whether Honda's Gross Profit Margin recovery is sustainable, how Toyota allocates its high level of Free Cash Flow between investment and Shareholder Returns, and whether Nissan's cost improvements can absorb its non-operating burdens.