What Could Drive Toyota Stock in 2017?




Toyota Motor Corporation (TM) is a well-known name in the global auto industry. Despite being founded much later than mainstream US automakers (IYK) such as General Motors (GM) and Ford (F), Toyota became the world’s largest automaker by volume in 2008. Toyota’s 2016 US sales were also higher than Fiat Chrysler’s (FCAU) US sales. In this part of the series, we’ll find out what could drive Toyota stock in 2017. First, let’s take a look at its recent price performance.

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Toyota stock performance

Last year, Toyota underperformed the broader market and delivered a negative return of about 4.7%. Investors’ concerns about a possible slowdown in overall US auto sales along with already falling car sales could be the primary reason for Toyota’s negative performance on Wall Street.

In 2016, Toyota sold ~2.4 million vehicle units in the US market—a fall of 2.0% from 2.5 million units in 2015. The company sells its vehicles in the US market under two key brands—Toyota and Lexus.

Note that Japanese automakers Toyota and Honda rule the car segment in the US auto market. Toyota’s Camry and Corolla models were the two best-selling car models in the US in 2016.

Focus on truck sales

In the truck segment, Toyota sells the Tacoma and Tundra in the US market. However, its sales figures are still behind Ford’s F-Series and General Motors’ Chevrolet Silverado trucks. At a time when US truck sales are outperforming car sales, Toyota plans to improve its truck segment’s presence in the US. Stronger truck sales along with its existing solid car sales could benefit Toyota in 2017 and drive its stock.

In the next part, we’ll discuss what analysts recommend for Ferrari stock in 2017.


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