Mitsubishi Motors untraded, set to fall after 1Q profit miss

Mitsubishi Motors untraded, set to fall after 1Q profit miss

Mitsubishi Motors Corporation (MMTOF) reported a significant decline in its first-quarter financial results for the fiscal year ending March 2026, leading to a drop in its stock price. The Japanese automaker's operating income plunged 84% year-on-year to ¥5.6 billion ($38 million), well below the ¥13.2 billion forecast by analysts [1].

The company's Chief Financial Officer, Kentaro Matsuoka, attributed the poor performance to the impact of tariffs imposed on US car imports. Although the tariffs were reduced from 25% to 15% under a new trade deal with the US, the tariffs have already started to affect sales [1]. This reduction in tariffs is expected to mitigate the impact but not completely lift the burden on the nation's automakers.

The trade deal, which Trump announced on Wednesday, offered some relief to Japan's major automakers. However, it did not include an exemption for Japan from a 50% tariff on imported steel and aluminum goods [1]. This has prompted several Japanese automakers to review their investments and consider on-shoring production or raising prices in the US. For instance, Honda Motor Co. postponed its $11 billion EV supply chain expansion in Canada and will move production of the hybrid Civic model to the US from Japan, while Subaru Corp. is reviewing all of its investments [1].

The gross industry impact of the tariffs is now projected to be around ¥1.9 trillion, a downward revision from the previous estimate of around ¥3.5 trillion under 25% tariffs [1]. Despite the challenging environment, Mitsubishi Motors maintained its annual profit guidance, expecting ¥100 billion in operating income for the fiscal year ending March 2026 [1].

Mitsubishi Motors also announced that it would raise prices in the US for three models by an average of 2.1% as part of a regular adjustment to counter inflation [1]. The US remains the biggest export market for Japanese carmakers, with $40.8 billion of vehicles sold there last year.

The stock price of Mitsubishi Motors has fallen since the announcement of the first-quarter results, reflecting the market's negative sentiment towards the company's performance. The most recent analyst rating on the stock is a Hold with a Yen440.00 price target [2]. The average trading volume of the stock is 7,509,643 shares, and the current market cap is Yen567.5 billion [2].

References:
[1] https://financialpost.com/pmn/business-pmn/mitsubishi-motors-welcomes-us-trade-deal-as-income-takes-a-hit
[2] https://www.tipranks.com/news/company-announcements/mitsubishi-motors-reports-sharp-decline-in-q1-financial-results
[3] https://seekingalpha.com/news/4471232-mitsubishi-motors-reports-q1-result
[4] https://www.automotiveworld.com/news-releases/mitsubishi-motors-announces-its-first-quarter-financial-results-for-fy2025/