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Toyota Motor Corp ADR TM

Morningstar Rating
$234.87 +0.43 (0.18%)
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Company Report

Toyota Earnings: Large Volume and Pricing Improvements Provide Massive Third-Quarter Earnings Boost

Toyota reported an excellent fiscal 2024 third quarter and raised guidance. EPS of JPY 100.62 rose by 88.4% year over year and beat the LSEG consensus of JPY 81.61. We are increasing our yen and U.S. dollar fair value estimates each by over 3% to JPY 3,000 per share and $200 per share to model higher profits for fiscal 2024 and fiscal 2025. For fiscal 2024 guidance, the company increased its operating income projection by 8.9% from prior guidance to JPY 4.9 trillion. Management’s increase comes from higher volume and pricing contributions than previously expected as well as cost reductions offsetting rising materials costs and continued contribution from a weak yen against the dollar and other currencies. We think the company can beat its full-year outlook because demand should remain robust and guidance now assumes a full-year exchange rate of JPY 143/USD 1 (JPY 141 previously), which is stronger than where the yen trades in early February at around JPY 148. The strong second half of the year profits, in our view, bodes well for the full-year dividend payout to be announced later this year.

Price vs Fair Value

TM is trading at a 17% premium.
Price
$234.45
Fair Value
$691.00
Uncertainty
High
1-Star Price
$453.00
5-Star Price
$751.00
Economic Moat
Kbnm
Capital Allocation
Gvzzcvs

Bulls Say, Bears Say

Bulls

Its popular vehicles usually allow Toyota to use fewer incentives than the Detroit Three, boosting the firm's profits and improving the resale value of vehicles.

Bears

Environmental laws are becoming stricter, which will make cars more expensive to produce and more expensive for consumers to buy.

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News

Trading Information

Previous Close Price
$234.44
Day Range
$234.74235.44
52-Week Range
$132.40235.44
Bid/Ask
$234.56 / $235.29
Market Cap
$316.66 Bil
Volume/Avg
1,575 / 325,143

Key Statistics

Price/Earnings (Normalized)
13.18
Price/Sales
0.99
Dividend Yield (Trailing)
1.92%
Dividend Yield (Forward)
1.71%
Total Yield
2.56%

Company Profile

Founded in 1937, Toyota is one of the world's largest automakers, with 10.56 million units sold at retail in fiscal 2023 across its light-vehicle brands. Brands include Toyota, Lexus, Daihatsu, and truckmaker Hino; market share in Japan is about 51% excluding mini-vehicles, while U.S. share is around 15%. The firm also owns 3.3% of Denso, a parts supplier, about 20% of Subaru, and holds investments in many other firms, including shares of Uber Technologies, Joby Aviation, Aurora Innovation, Isuzu Motors, and about 5% in each of Mazda and Suzuki. Fiscal 2023 sales excluding financial services were JPY 34.4 trillion. Toyota also has a financing arm and manufactures homes and boats.
Sector
Consumer Cyclical
Industry
Auto Manufacturers
Stock Style Box
Large Core
Total Number of Employees
381,576

Competitors

Valuation

Metric
TM
MBGAF
F
Price/Earnings (Normalized)
13.184.746.19
Price/Book Value
1.330.781.18
Price/Sales
0.990.460.29
Price/Cash Flow
5.903.303.69
Price/Earnings
TM
MBGAF
F

Financial Strength

Metric
TM
MBGAF
F
Quick Ratio
0.980.831.01
Current Ratio
1.181.241.20
Interest Coverage
320.5162.152.82
Quick Ratio
TM
MBGAF
F

Profitability

Metric
TM
MBGAF
F
Return on Assets (Normalized)
5.79%5.98%3.08%
Return on Equity (Normalized)
15.14%17.96%18.80%
Return on Invested Capital (Normalized)
6.76%8.72%4.23%
Return on Assets
TM
MBGAF
F
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