Seoul/Tokyo Fitch Ratings, 24 November 2021: Toyota Motor Corporation’s senior unsecured rating of “A+” and its long-term foreign and local currency issuer default ratings (IDR) have both been confirmed by Fitch Ratings. The IDR’s outlook remains stable. Toyota’s Short-Term Foreign- and Local-Currency IDRs at “F1” have also been confirmed by Fitch.
In This Article...
Is Toyota currently a buy?
TM currently has a Value grade of A and a Zacks Rank of #1 (Strong Buy). The stock’s P/E ratio is 9.10, while the P/E for its sector is 10.96 on average. The Forward P/E for TM has ranged from 10.67 to 13.59 over the past 12 months, with a median of 10.67.
Who is Toyota’s principal rival?
Honda, a well-known brand in the automotive industry, has its headquarters in Japan and produces motorcycles, aviation, and power equipment. It leads the globe in the production of powerful automobiles. Honda not only designs, manufactures, and sells the vehicles, but also offers fantastic after-sales support to their clients.
About 14 million internal combustion engines are produced by the company annually; Honda is the largest internal combustion engine manufacturer. One of the company’s greatest achievements is the Research and Development division of Honda, which is exceptional and constantly working to produce fantastic vehicles. The designs are a huge hit with consumers.
To keep up with the demands of technology, each of their vehicles is likewise equipped with cutting-edge equipment. About 100 different car models are included in their extensive product line, along with other vehicles like bikes and scooters. Honda is regarded as one of the main rivals to Toyota because of their reputation and significant market share.
Toyota produced how many automobiles in 2021?
The Toyota Group expanded global auto sales, global production, and vehicle exports from Japan in 2021. This includes the Toyota brand, Lexus, Daihatsu, and Hino.
The Toyota Group boosted its global sales in the full calendar year of 2021 by 10.1% to approximately 10.5 million vehicles, keeping its lead as the biggest automaker in the world. Sales of the Toyota brand increased globally by 10.6%, and despite weaker domestic sales in Japan, the brand gained market share. Despite persistent manufacturing challenges with a lack of semiconductors and COVID limitations in many countries, the global car production of the Toyota group climbed by 9.4% in 2021 to slightly over 10 million vehicles. To little over 1.8 million vehicles, Toyota Motor Corporation’s automotive exports from Japan climbed by 1.6%. For Toyota and Lexus, the biggest market for new cars is still the US.
Is Toyota a worthwhile investment for 2021?
Toyota Motor is a buy for a number of reasons. The draw in this case is the brand name, which enjoys a devoted fan base, which naturally creates a strong demand for any future EV offering with the Toyota or Lexus badge. Even if the corporation hasn’t been a pioneer in battery-powered EVs, given its extensive global infrastructure and manufacturing know-how, its plan to build up in that direction seems plausible. According to this metric, the company continues to have a positive growth outlook and is in a good position to increase its market share globally.
With a price estimate of $235.00 for the next year, which corresponds to a 1-year forward P/E of 10x the current consensus fiscal 2023 EPS, we rank shares of TM as a buy. The chart below shows that since the peak of the pandemic crash in 2020, shares of TM have been closely following a trendline. This pattern should continue, in our opinion, and the most recent decline from the early-January high of $212 signals a fresh window for purchasing.
We are adopting a more upbeat stance in the midst of all the stories about macro concerns, heightened inflation pressures on consumer discretionary spending, and rising interest rates. Nevertheless, there are dangers to think about. The positive case for the stock might be undermined by a worsening of the forecast for global growth while keeping a watch on events in Eastern Europe related to the conflict between Russia and Ukraine. A review of the long-term profits prospects would allow for a leg lower in the stock if the results were less than anticipated and below management guidance. Over the coming quarters, keep an eye on things like production and sales levels, the operating margin, and any changes to the BEV plan.
Is Toyota a worthwhile investment for 2022?
One Wall Street analyst analyzing the (NYSE: TM) stock has determined that the stock should be held.
Out of one analyst, 0 (zero percent) recommends TM as a Strong Buy, 0 (zero percent) as a Buy, 1 (one hundred percent) as a Hold, 0 (zero percent) as a Sell, and 0 (zero percent) as a Strong Sell.
TM (NYSE) Toyota Motor’s projected annual earnings growth rate of 12 percent will not surpass the average anticipated earnings growth rate of 18.66 percent for the US auto manufacturers industry, nor will it surpass the average forecast earnings growth rate of 15.61 percent for the US market.
In 2022, Toyota Motor will earn $20,925,917,767.
The average TM earnings prediction from 3 Wall Street analysts is $238,364,616,711, with the lowest TM earnings prediction being $222,381,786,920 and the highest TM earnings prediction being $250,213,956,039, respectively. Three Wall Street analysts predicted that TM will earn $264,130,040,598 in earnings in 2024 on average, with the lowest TM earnings prediction coming in at $244,564,852,406 and the highest TM earnings prediction coming in at $280,801,785,467.
TM is anticipated to earn $292,237,775,748 in 2025, with the lowest and highest estimates of earnings being $265,783,436,784 and $318,554,331,697, respectively.
TM (NYSE) Toyota Motor’s projected yearly revenue growth rate of 9.87 percent will surpass the average expected revenue growth rate of 9.49 percent for the US market, but it will fall short of the US auto manufacturers industry’s average anticipated revenue growth rate of 33.07 percent.
In 2022, Toyota Motor will earn $230,392,856,093.
The median revenue estimate from two Wall Street analysts for TM in 2023 is $3,862,509,851,073,843, with the lowest estimate coming in at $3,779,390,869,179,509 and the highest estimate coming in at $3,945,628,832,968,178. With the lowest TM revenue projection at $3,919,884,076,533,214 and the highest TM revenue forecast at $4,204,914,422,743,787, two Wall Street analysts expect TM’s revenue will be $4,062,399,249,638,500 in 2024.
The estimated revenue for TM in 2025 is $4,199,484,394,105,297, with the lowest estimate coming in at $4,053,088,562,370,142 and the highest estimate coming in at $4,345,880,225,840,451.
(NYSE: TM) expected ROA is 58.8%, exceeding the estimated 33.58% industry average for US Auto Manufacturers.
The average TM price target is $179.41, with the highest TM stock price projected at $179.41 and the lowest TM stock price predicted at $179.41, according to 1 Wall Street analyst who has published a 1 year TM price target.
By July 7, 2023, the Wall Street analyst expected Toyota Motor’s share price to reach $179.41. From the present TM share price of $156.70, the average Toyota Motor stock price projection predicts a possible increase of 14.49 percent.
TM (NYSE) The current Earnings Per Share (EPS) for Toyota Motor is $15.07. The average analyst estimate for TM’s EPS for 2023 is $17.30, with the lowest estimate coming in at $16.14 and the highest estimate coming in at $18.16. Analysts expect TM’s EPS will be $19.17 on average for 2024, with the lowest estimate coming in at $17.75 and the highest at $20.38. The estimated EPS for TM in 2025 will be $21.21 (range: $19.29 to $23.12).
What are Toyota’s shortcomings?
The flaws in Toyota suggest significant organizational inefficiencies. This SWOT analysis model component identifies the internal strategic elements that operate as barriers to firm expansion. The following are Toyota’s primary flaws:
- Organizational structure in hierarchy
- Organizational culture of secrecy
- consequences of recent product recalls
Toyota’s global hierarchical organizational structure limits regional operations’ ability to be as flexible as possible. Additionally, the corporate culture of secrecy is a flaw that slows down response times for new issues. Toyota also began a large-scale program of product recalls in 2009. These recalls hurt the company because the recall procedures use up resources that may be better utilised for product distribution. This section of the SWOT analysis demonstrates how Toyota could strengthen its performance by making changes to weak points based on its organizational structure and culture.
Does Honda outperform Toyota?
Toyota has more automobiles, better costs, and higher reliability in the categories we looked at, making it the superior brand. When deciding between Honda and Toyota, Honda isn’t a slouch either thanks to its comparable reliability ratings, reasonable prices, and even higher safety ratings.
Why is Toyota so prosperous?
No executive needs to be persuaded that Toyota Motor Corporation has grown into one of the biggest businesses in the world thanks to the Toyota Production System (TPS). The unconventional production process helps the Japanese giant produce the world’s greatest cars at the lowest possible cost and to launch new products swiftly. Toyota’s competitors, including Chrysler, Daimler, Ford, Honda, and General Motors, have not only created systems similar to TPS, but hospitals and postal services have also embraced it to improve their efficiency. Managers consider TPS’s involvement in Toyota’s success to be one of the few enduring truths in an otherwise cloudy environment since lean-manufacturing specialists have praised it so often and with such fervor.
But this isn’t helpful to executives, much like many other myths about Toyota. It’s a partial truth, and partial truths can be harmful. Over the course of our six-year investigation, we visited Toyota sites in 11 different nations, participated in a large number of business meetings and events, and examined internal records. In addition, we interviewed 220 Toyota workers, including Katsuaki Watanabe, the company’s president as well as shop floor workers. Our study demonstrates that while TPS is essential, it is not by any means sufficient to explain Toyota’s performance.
Simply said, Toyota Production System (TPS) is a “hard innovation” that enables the corporation to continuously improve how it produces cars. Toyota has also developed a “soft innovation” that pertains to corporate culture. We think that the company’s success is a result of the inconsistencies and paradoxes it introduces into various facets of organizational life. Employees must function in a culture where they must continually come up with new solutions to problems and obstacles. Because of this, Toyota is continually improving. Both hard and soft technologies complement one another. Together, they advance the company like two equally weighted wheels on a shaft. Although competitors and industry experts have thus far ignored it, Toyota’s culture of contradictions contributes just as significantly to its success as TPS does.
Toyota thinks that success cannot be assured by efficiency alone. There is no doubt that Toyota employs Taylorism to the fullest extent. What makes the company different is that it sees its people as knowledge workers who amass chiethe wisdom of experience on the company’s front lines, not just as pairs of hands. As a result, Toyota makes significant investments in its employees and organizational capacity and collects ideas from everyone and anywhere, including the shop floor, the office, and the field.
Toyota sees its personnel as knowledge workers who amass chiethe wisdom of experience on the company’s front lines, not merely as pairs of hands.
At the same time, research on human cognition demonstrates that when people wrestle with conflicting views, they comprehend the various facets of a problem and develop workable solutions. As a result, Toyota intentionally promotes divergent opinions within the company and encourages staff to work across differences to find solutions as opposed to making concessions. This high-tension environment inspires creative solutions that Toyota uses to outperform rivals both gradually and dramatically.
We shall discuss some of the major paradoxes that Toyota promotes in the pages that follow. We’ll also demonstrate how the business unleashes six forces, three of which encourage experimentation and growth while the other three support the maintenance of its core principles and identity. Finally, we’ll briefly go over how other businesses may discover how to profit from contradictions.
Why are Toyota sales falling off?
In the first three months of the year, automobile and truck sales in the United States fell significantly for General Motors and Toyota Motor as the global chip shortage continued to stymie production and leave dealers with empty lots.
G.M. announced on Friday that sales of its light automobiles and light trucks fell by 20% to 512,846 units. The largest automaker in the world, Toyota, sold 514,592 automobiles in the first three months of the year, a decline of 15%. Later in the quarter, the company’s slow sales worsened, falling 24 percent from a year earlier in March.
Edmunds, a source of automotive analytics, predicted that 3.2 million vehicles would be sold overall in the industry during the quarter, down from 3.9 million the previous year.
According to Jessica Caldwell, managing director of analytics at Edmunds, “skyrocketing gas costs were front of mind for buyers in March, but the shortage of inventory is what ultimately reduced new vehicle sales in the first quarter. “The continued production and supply chain interruptions brought on by the chip scarcity and Covid-19 are still a problem for the auto industry. Additionally, they might have to deal with brand-new difficulties as a result of the invasion of Ukraine.
In its annual report on Thursday, Rivian, an electric vehicle producer that recently started selling a pickup truck, also mentioned the situation in Ukraine and said that it had an impact on numerous aspects of its business and operations.
For the remainder of this year, Ms. Caldwell projected automakers and dealers would struggle with inventory shortages.
According to General Motors, its dealers have 273,760 automobiles in stock or on the way to their lots. Despite being less than at the end of March 2021, when its dealers had 334,628 vehicles in stock, this was an improvement over the second half of last year.
However, corporate representatives expressed their optimism that chip supply would soon improve. While supply chain issues are still present, Steve Carlisle, an executive vice president and president of G.M. North America, stated in a statement that “we plan to continue outperforming 2021 production levels, particularly in the second half of the year.
According to G.M., a healthy labor market, increased production, and pent-up demand should all contribute to sales of new cars and trucks in the United States exceeding 15 million this year.
Elaine Buckberg, the chief economist at General Motors, stated that light car sales in the 17 million level would typically result from a healthy U.S. economy.
Despite challenges from increasing inflation and gasoline prices, supply chain improvements should boost auto sales as the year goes on.
The fastest growing section of the auto market, electric car sales for G.M. remained incredibly low in the first quarter. Less than 500 products were sold by the company, 99 of which were Hummer pickup vehicles.
Toyota, which does not currently have completely electric vehicles for sale in the US, reported robust demand for hybrid cars, whose sales only dropped 4% in the first quarter.
Later on Friday, it’s anticipated that Honda, Stellantis, and other automakers would release their sales figures. On Monday, Ford Motor will announce its sales results.