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.
In This Article...
Toyota: Should I Buy or Sell?
Buy is the general consensus for Toyota Motor. Based on 3 buy ratings, 2 hold ratings, and no sell ratings, the firm has an average rating score of 2.60.
Is Toyota a worthwhile investment for 2022?
The price of the (TM) shares as of August 4th, 2022 is $157.31. Compared to being down -14.01% over the previous year, the (TM) stock is down -3.2% over the last five trading days. (TM) is now down -15.1% in 2022.
Is a surge in Toyota stock anticipated?
The consensus price target among the 18 analysts that are providing 12-month price projections for Toyota Motor Corp. is 187.78, with a high estimate of 204.15 and a low estimate of 147.77. From the most recent price of 156.27, the median forecast reflects a rise of +20.16%.
Analyst Recommendations
The current consensus among the 21 investment analysts surveyed is to buy Toyota Motor Corporation stock. Since August, when it remained unchanged from a Buy rating, this rating has been stable. Mouse over the previous months for more information.
Toyota: A reliable dividend stock?
Toyota distributes 25.4% of its earnings to its stockholders. Our indicator for the dividend’s dependability is 0.87 out of a possible 1.0. This suggests a historically dependable dividend payer. Analysts also anticipate a 20.58% increase in the dividend for the current fiscal year.
Toyota stock: Is it overpriced?
According to GuruFocus Value assessment, the stock of Toyota Motor (NYSE:TM, 30-year Financials) exhibits all the symptoms of being materially overvalued. The stock should be traded at the GuruFocus Value, which is GuruFocus’ assessment of the stock’s fair value. It is determined using previous stock multiples, historical business growth, and analyst projections of future business performance. An expensive stock will likely have a bad future return if its price is much higher than the GF Value Line. On the other hand, its future return will probably be larger if it is far below the GF Value Line. Toyota Motor stock appears to be extremely expensive at its current price of $182.41 per share and market worth of $255 billion. In the graph below, the GF Value for Toyota Motor is displayed.
The long-term return of Toyota Motor’s stock is probably going to be substantially lower than its expected future company growth, which is predicted to gain 0.06% yearly over the next three to five years, because Toyota Motor is significantly overvalued.
Why should I buy Toyota?
Toyota has been given the 2019 Best Resale Value for Best Brand award by Kelley Blue Book for the third year in a row because of their record for producing high-quality automobiles with exceptional reliability and longevity.
Toyota: Is it undervalued?
The P/CF for TM over the last year has ranged from 6.60 to 7.70, with a median of 5.29. These are just a few of the important indicators that contribute to Toyota Motor Corporation’s high Value rating, but they demonstrate how the company is now cheap.
What does Toyota pay for each share?
For the three months that ended in March 2022, Toyota Motor paid $2.27 in dividends per share. For the trailing twelve months (TTM) ending in March 2022, it paid $4.40 in dividends per share.
Toyota separated when?
A producer of automobiles is Toyota Motor. Co.’s main business activities include designing, producing, and marketing sedans, minivans, compact cars, sport utility vehicles, trucks, and related components and accessories globally. In order to assist the sales of cars and other items made by Co., Co. offers financing, car leasing, and a few other financial services primarily to its dealers and their clients. Design, production, assembly, and sales of passenger cars, minivans, trucks, and accessories are all included in Co.’s automotive business. Finance for dealers and their clients makes up the majority of Co.’s financial services activity. Toyota Motor has experienced 1 split, as per our data for the company’s stock splits in the past.
Our database of Toyota Motor stock splits shows 1 split for the company (TM). For TM, the separation happened on March 15, 1982. This was a 5 for 1 split, which meant that the shareholder now held 5 shares of TM instead of the pre-split 1 share. A 1000 share holding, for instance, before the split, became a 5000 share position after the split.
When a corporation splits its shares, like Toyota Motor did, the market capitalization before and after the split stays same, giving the shareholder additional shares but at a reduced value per share. However, a stock with a lower price per share frequently attracts a wider spectrum of buyers. If the share price increases as a result of the increased demand, the total market capitalization increases after the split. However, depending on the underlying principles of the firm, this does not always occur.
A stake size of 1000 shares at the beginning of the Toyota Motor stock split would have become 5000 shares at the current price. The compound annual growth rate (CAGR) for a short investment in Toyota Motor stock, commencing with a $10,000 purchase of TM, is examined here. It is presented on a split-history-adjusted basis taking into account the whole Toyota Motor stock split history.
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The following firms, which are likewise in the Materials sector and have a history of stock splits, are grouped under TM:
Why are Toyota stock prices dropping?
Longer delivery windows brought on by the manufacturing slump and reduced inventory levels were the causes of the reduction. Due to production bottlenecks, the automaker had to cancel some orders for SUVs like the Harrier, also known as the Venza in North America.
Is Toyota superior to Ford?
The response is highly debatable. Ford is reportedly the winner, although some reports contend Toyota is more dependable.
For instance, approximately 90% of Ford vehicles received average or higher dependability ratings in Consumer Reports’ annual car reliability survey.
Only the Toyota Prius outperformed the Ford Fusion for Toyota when compared to the Ford vehicles, though.
Toyota is rated as being more reliable than Ford in the J.D. Power Vehicle Reliability Survey. Ford received a pitiful 3 out of 5 for reliability, compared to Toyota’s stellar 5 out of 5.
Going with the J. D. report seems more logical given that Toyota was identified as the manufacturer of vehicles with the longest lifespan in a separate report by Information Handling System (IHS) Automotive.
In addition, numerous Toyota models from the previous ten years, like the Tundra, Camry, and Avalon, are still in use today.
Which is better, Honda or 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 dependability ratings, reasonable costs, and even higher safety ratings.
Toyota, a value investment?
Investors should take into account that this is a capital-intensive, cyclical business with generally low margins before investing in any automaker. Generally, such are considered as drawbacks, which is why some investors may prefer to avoid the industry altogether.
There is still no standardized response for those who want exposure to the automotive business. Toyota is a well-known, internationally diverse company with a leadership team that appears to be focused on day-to-day operations and is not well-known to the general public. Furthermore, at approximately 12 times projected earnings, Toyota’s stock is not overly pricey. Toyota likewise has a strong dividend track record, however it should be noted that changes in the Yen/USD exchange rate can affect dividend income for US-based investors. For investors looking for a reliable, tested value play in the sector, Toyota may be the best option. It has fair EV plans and the potential to pay out significant dividends.
Tesla, though, is considerably different from that and might still be the best option for some investors. Its CEO is much more forceful, but you might also say that he exhibits some odd behavior, such as when he makes pronouncements about cryptocurrencies. Compared to Toyota, Tesla is much more expensive, significantly less lucrative, and less diverse. However, Tesla is expanding more quickly, and even though it is currently costly, TSLA may have more potential if Elon Musk’s ideas for autonomous vehicles materialize. Tesla is too big of a wager on unproven AV technology in my opinion, thus Toyota strikes me as the better option right now. However, depending on your objectives, investment strategy, and risk tolerance, you might decide that Tesla is the better option for your portfolio.
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