Price divided by earnings results in the Price to Earnings ratio, or P/E. It is the metric that is most frequently used to assess a company’s value in relation to its earnings. We are utilizing the consensus earnings estimate for the current fiscal year in this example (F1).
For instance, a company with a 20 P/E ratio is considered to be trading at 20 times yearly earnings. Generally speaking, a lower number or multiple is preferred over a higher one. Growth and momentum investors frequently are willing to pay much more, while value investors typically look for equities with P/E ratios under 20, according to research. However, you can also find value by evaluating the P/E ratio in relation to its relevant industry and its competitors in addition to using absolute statistics.
In This Article...
Has the time come to buy Toyota stock?
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 every 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 headlines about macro concerns, elevated 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 stock a wise investment in 2022?
One Wall Street analyst analyzing the (NYSE: TM) stock has determined that the stock should be held.
One analyst has given TM a Strong Buy recommendation of 0%, a Buy recommendation of 0%, a Hold recommendation of 100%, a Sell recommendation of 0%, and a Strong Sell recommendation of 0%.
Will the price of Toyota shares rise?
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 195.98 and a low estimate of 147.77. From the most recent price of 157.81, the median projection reflects a rise of +18.99%.
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.
Can I invest in Toyota Motor?
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.
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?
The Toyota brand has the highest resale value according to Kelley Blue Book. According to KBB, “it’s simple, just produce a fantastic car that makes people’s lives better, charge a fair price for it, and make sure the car is the most comfortable, dependable, and pleasurable car in its category.
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.
Will Toyota’s stock increase?
- Based on the stock performance over the previous 44 years, Toyota Motor has typically increased by 12.8% over the following 52 weeks.
- In 23 of those 44 years, Toyota Motor has increased over the ensuing 52-week period, giving it a historical accuracy of 52.27%.
- Is the stock of Toyota Motor Undervalued?
The Score for TM is 31, which denotes more risk than average and is 38% lower than its previous median score of 50.
- TM’s current stock price is in the 30 and 40% percentile area in terms of its previous Stock Score levels.
Why are Toyota stock prices dropping?
As a result of the chip scarcity and the Shanghai lockdowns, Toyota on Thursday announced a net profit of 736.8 billion yen for the April to June quarter, a decrease of 17.9% from a year earlier. The vice’s other side was formed by rising material prices.
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.
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.