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Toyota Motor Corp ADR TM

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Toyota's Fiscal Third-Quarter Bounces Bank Strong From the Pandemic

Analyst Note

| David Whiston, CFA, CPA, CFE |

Toyota’s fiscal 2021 third-quarter results showed a strong recovery underway after the pandemic. We are raising our fair value estimates to $146 and JPY 7,600 on the time value of money, higher profit forecasts for fiscal 2021 and fiscal 2022, and a slightly weaker yen on average against the dollar than previously modeled across our five-year forecast period. Consolidated quarterly revenue increased year over year by 7.1% to JPY 8.15 trillion while operating profit rose by 54.4% to JPY 987.9 billion. Operating margin increased by 370 basis points to 12.1%. Variables such as volume and mix drove most of the improvement and Americans love of light truck models is likely contributing to that delta. The yen did strengthen against the dollar year over year (JPY 105 versus JPY 109) but the JPY 55 billion operating profit headwind from exchange was easily surpassed by JPY 405 billion of marketing efforts (volume mix, and other unspecified factors) and cost reductions.

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Company Profile

Business Description

Founded in 1937, Toyota is one of the world's largest automakers with 10.5 million units sold in fiscal 2020. Its brands include Toyota, Lexus, Daihatsu, and Hino; market share in Japan is about 49%, while U.S. share is nearly 14.5%. The firm also owns 24.5% of Denso, a parts supplier, 20% of Subaru, and holds investments in many other firms, including about 10.3 million shares of Uber Technologies and about 5% in each of Mazda and Suzuki. Fiscal 2020 sales excluding financial services were JPY 27.8 trillion. Toyota also has a financing arm and manufactures homes and boats.

1 Toyota-cho, Aichi Prefecture
Toyota, 471-8571, Japan
T +81 565282121
Sector Consumer Cyclical
Industry Auto Manufacturers
Most Recent Earnings Dec 31, 2020
Fiscal Year End Mar 31, 2021
Stock Type
Employees 367,987