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Toyota Motor (JP:7203)
:7203

Toyota Motor (7203) AI Stock Analysis

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Toyota Motor

(LSE:7203)

72Outperform
Toyota Motor scores a 72, reflecting strong financial performance and attractive valuation, tempered by weak technical indicators. The company's robust revenue growth, profitability, and stable financial structure support its strong financial performance. However, the technical analysis suggests bearish momentum, with the stock trading below key moving averages. The low P/E ratio and high dividend yield indicate the stock is undervalued, contributing positively to the score.
Positive Factors
Competitive Advantage
Toyota's key competitive advantage lies in its mass-market offering, with the largest global automobile market share of 11.5% ahead of its peers.
Market Reaction
The stock gained 3% following the guidance hike, showing a positive market reaction.
Profit Guidance
Toyota lifted FY3/25 operating profit guidance, mainly due to positive forex influence and marketing initiatives.
Negative Factors
Currency Exposure
Toyota has c.50% revenue exposure in USD and EUR; Weakening USD/EUR against the JPY may lead to downside to its earnings.
Demand Risks
Toyota is exposed to demand risks related to China and mass-market sales, as well as elevated raw material costs.
Earnings Miss
Toyota reported a sharp earnings miss due to exceptional valuation losses in foreign currency-denominated assets.

Toyota Motor (7203) vs. S&P 500 (SPY)

Toyota Motor Business Overview & Revenue Model

Company DescriptionToyota Motor Corporation is a globally recognized automotive manufacturer headquartered in Toyota City, Japan. It operates in the automotive sector, producing a wide range of vehicles, including passenger cars, trucks, and commercial vehicles. Toyota is known for its innovation in hybrid technology, exemplified by its Prius model, and its commitment to quality and reliability. The company also engages in the design, manufacture, and sale of motor vehicles and related parts and accessories, as well as providing financial services and other related businesses.
How the Company Makes MoneyToyota Motor Corporation generates revenue primarily through the sale of automobiles and automotive parts. Key revenue streams include sales of its diverse range of vehicles, which span from fuel-efficient compact cars to luxury vehicles and commercial trucks. The company also earns income from its financing operations, offering loans and leases to customers and dealerships through its financial services arm. Additionally, Toyota benefits from strategic partnerships and joint ventures globally, which help expand its manufacturing capabilities and market reach. Its focus on innovation in hybrid and electric vehicles continues to be a significant growth driver, as global demand for environmentally friendly transportation solutions rises.

Toyota Motor Financial Statement Overview

Summary
Income Statement
Balance Sheet
Cash Flow
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
46.75T45.10T37.15T31.38T27.21T29.93T
Gross Profit
9.50T9.37T6.31T5.97T4.83T5.41T
EBIT
4.79T5.35T3.67T3.00T2.96T2.44T
EBITDA
7.12T8.39T5.19T4.82T4.61T4.13T
Net Income Common Stockholders
5.10T4.94T2.45T2.85T2.25T2.04T
Balance SheetCash, Cash Equivalents and Short-Term Investments
13.88T14.11T9.23T8.62T9.32T5.70T
Total Assets
94.67T90.11T74.30T67.69T62.27T52.68T
Total Debt
39.58T36.56T29.38T26.50T25.66T20.55T
Net Debt
31.29T27.15T21.86T20.38T20.56T16.36T
Total Liabilities
57.82T54.87T45.04T40.53T37.98T31.94T
Stockholders Equity
35.91T34.22T28.34T26.25T23.40T20.06T
Cash FlowFree Cash Flow
-1.60T-842.02B-750.76B-107.63B-1.04T-4.49B
Operating Cash Flow
4.24T4.21T2.96T3.72T2.73T3.59T
Investing Cash Flow
-4.29T-5.00T-1.60T-577.50B-4.68T-3.15T
Financing Cash Flow
391.01B2.50T-56.18B-2.47T2.74T397.14B

Toyota Motor Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2582.00
Price Trends
50DMA
2654.44
Negative
100DMA
2714.62
Negative
200DMA
2696.97
Negative
Market Momentum
MACD
-61.07
Negative
RSI
43.53
Neutral
STOCH
53.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7203, the sentiment is Negative. The current price of 2582 is above the 20-day moving average (MA) of 2527.37, below the 50-day MA of 2654.44, and below the 200-day MA of 2696.97, indicating a bearish trend. The MACD of -61.07 indicates Negative momentum. The RSI at 43.53 is Neutral, neither overbought nor oversold. The STOCH value of 53.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:7203.

Toyota Motor Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$1.72T4.3115.47%4.45%6.27%19.66%
72
Outperform
¥31.52T6.2814.89%3.57%6.94%15.37%
72
Outperform
$1.22T10.448.59%4.95%-5.66%-28.73%
71
Outperform
$6.68T6.348.11%4.64%12.25%15.01%
68
Neutral
$3.17T8.1914.33%2.53%14.46%62.35%
64
Neutral
$1.09T11.111.86%4.78%3.17%-74.41%
60
Neutral
$6.55B11.403.27%4.25%2.38%-21.30%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:7203
Toyota Motor
2,582.00
-919.90
-26.27%
JP:7201
Nissan Motor Co
327.80
-228.30
-41.05%
JP:7202
Isuzu Motors
1,875.50
-13.74
-0.73%
JP:7269
Suzuki Motor
1,663.50
-110.74
-6.24%
JP:7267
Honda Motor Co
1,418.50
-292.42
-17.09%
JP:7270
SUBARU
2,499.50
-735.63
-22.74%

Toyota Motor Earnings Call Summary

Earnings Call Date: Jul 31, 2025 | % Change Since: -8.51% | Next Earnings Date: Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. While the company demonstrated stability in operating income and increased investments and dividends, challenges such as decreased net income due to foreign exchange losses, production halts, and regional challenges in North America and China were evident.
Highlights
Stability in Operating Income
Despite production halts and additional expenses, the company achieved an operating income of 2.4642 trillion yen, nearly on par with the previous fiscal year.
Increase in Investment and Dividends
Investment in human resources and growth areas increased to 830 billion yen for the full year, and the interim dividend was raised by 10 yen to 40 yen per share, with a forecasted full-year dividend increase to 90 yen per share.
Strong Performance of Electrified Vehicles
The proportion of electrified vehicles increased to 44.4%, mainly due to strong HEV sales in North America, Europe, and Asia.
Recovery in Production Volume
Second half production is expected to recover with a global pace of 10 million units, and domestic production volume aims to reach 1.75 million units.
Lowlights
Decrease in Net Income
Net income decreased significantly to 1.9071 trillion yen due to valuation losses in foreign currency denominated assets caused by exchange rate fluctuations.
Impact of Certification Issues
Production halts to address certification issues led to a decrease in sales volume and operating income by 140 billion yen.
Challenges in North America
North America faced a decrease in sales volume and mix, increasing labor costs, and one-time expenses related to recalls.
Profitability Pressure in China
Despite maintaining competitiveness, the company faced profitability challenges in China, on par with domestic manufacturers amidst intense competition.
Company Guidance
In the fiscal year 2025 Q2 financial briefing, Toyota reported an operating income of 2.4642 trillion yen for the first half, maintaining a full-year forecast of 4.300 trillion yen. Consolidated vehicle sales were 4.556 million units, accounting for 96% of the previous year, with Toyota and Lexus sales slightly higher at 97.2%. The company plans to invest 830 billion yen in human resources and growth areas, aiming for a production recovery in the second half. Shareholder returns include a 10 yen increase in interim dividends to 40 yen per share and a full-year dividend forecast of 90 yen per share. Despite a net income decrease due to foreign exchange rate fluctuations, Toyota anticipates sales revenues of 46 trillion yen and a net income of 3.570 trillion yen for the full fiscal year. Efforts to enhance earnings include reducing incentives, expanding value chain earnings, and addressing production challenges, notably in North America and China. Toyota also emphasizes ongoing Gemba improvements and strategic investments to ensure sustainable growth and competitiveness.

Toyota Motor Corporate Events

Toyota Reports Hino Motors’ Financial Discrepancies
Apr 24, 2025

Toyota Motor Corporation announced a difference in the non-consolidated financial results of its subsidiary, Hino Motors, Ltd., for the fiscal year ending March 31, 2025, compared to the previous year. Despite a significant increase in net sales, Hino Motors reported a substantial loss, but Toyota expects this to have an immaterial impact on its consolidated results. This announcement highlights the challenges faced by Hino Motors, which may affect its financial stability and stakeholder confidence.

Toyota Clarifies Media Reports on Subsidiary Integration
Apr 22, 2025

Toyota Motor Corporation addressed media reports about a potential business integration involving one of its subsidiaries, clarifying that no final decisions have been made. The company emphasized that details such as the agreement, investment ratios, and other specifics are yet to be determined, and any significant developments will be announced promptly.

Toyota Completes Major Share Repurchase Initiative
Apr 18, 2025

Toyota Motor Corporation has completed a significant repurchase of its common stock, acquiring over 16 million shares for approximately JPY 39.9 billion between April 1 and April 15, 2025. This repurchase is part of a larger initiative authorized by the board of directors to buy back up to 530 million shares, with a maximum expenditure of JPY 1.2 trillion, aimed at enhancing shareholder value and optimizing capital structure.

Toyota Announces Significant Share Repurchase in March 2025
Apr 3, 2025

Toyota Motor Corporation announced the repurchase of over 13 million shares of its common stock in March 2025, amounting to approximately JPY 37.7 billion. This move is part of a larger share repurchase initiative authorized by the board, aiming to repurchase up to 530 million shares by April 2025, potentially impacting shareholder value and market perception positively.

Toyota Introduces Share-Based Compensation Plan for Senior Employees
Mar 24, 2025

Toyota Motor Corporation has announced the introduction of a share-based compensation plan using an ESOP trust structure for senior employees. This initiative aims to align employees with management goals, enhancing corporate value and supporting the company’s transformation during a significant industry shift.

Toyota Introduces Shareholder Benefit Program to Reward Long-Term Investors
Mar 3, 2025

Toyota Motor Corporation has announced the introduction of a shareholder benefit program aimed at rewarding long-term shareholders and encouraging them to hold shares for extended periods. Eligible shareholders will receive credits through the TOYOTA Wallet application based on the number of shares held and the duration of their holding period, with additional opportunities to win prizes. This initiative is expected to strengthen shareholder loyalty and deepen investors’ understanding of Toyota’s business operations.

Toyota Announces Executive Restructuring to Boost Efficiency
Feb 25, 2025

Toyota Motor Corporation announced changes to its executive and senior management structure, effective April 1, 2025. These changes are aimed at enhancing the company’s operational efficiency and strategic direction. The restructuring includes new roles and responsibilities for key executives, reflecting Toyota’s commitment to digital transformation and competitive growth in the automotive industry.

Toyota Announces Changes in Leadership Roles
Feb 25, 2025

Toyota Motor Corporation announced changes in its representative directors, which were decided at a recent Board of Directors meeting. These changes, which involve shifts in duties and responsibilities among key executives, are part of an effort to adjust the authority of representation within the company. The formal appointments will be finalized following the 121st Ordinary General Shareholders’ Meeting, reflecting Toyota’s strategic approach to leadership and governance.

Toyota Transitions to Strengthen Board Governance
Feb 25, 2025

Toyota Motor Corporation announced its decision to transition from a company with an Audit and Supervisory Board to one with an Audit and Supervisory Committee, aiming to reinvigorate its Board of Directors. This change is expected to enhance decision-making speed and strengthen the board’s monitoring functions, aligning with Toyota’s goal of transforming into a mobility company and ensuring long-term corporate value enhancement.

Toyota Announces Substantial Share Repurchase to Boost Shareholder Value
Feb 5, 2025

Toyota Motor Corporation announced the repurchase of over 15 million shares of its common stock in January 2025, as part of a larger share buyback plan initiated in 2024. This strategic move reflects Toyota’s commitment to enhancing shareholder value, and it indicates strong financial health, potentially influencing its market position and investor confidence positively.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.