What to Expect from Toyota’s Upcoming Earnings

According to Wall Street analysts’ estimates, Toyota Motor (TM) is expected to post adjusted EPS (earnings per share) of 156.4 Japanese yen or $1.40 in fiscal 1Q18. This would be about 13.6% lower than the company’s EPS of 181.1 Japanese yen reported in 1Q17.

Analysts expect Toyota’s global revenues to improve marginally by about 2.2% on a YoY (year-over-year) basis for the quarter. However, these estimates don’t reflect any improvement in the company’s profit margin. According to the estimates, Toyota’s net profit margins in 1Q18 could fall to 6.8% from 8.4% in 1Q17.

Now, let’s look at some key technical levels in Toyota’s stock.

In 2016, Japanese auto giant Toyota was the second-largest automaker in the world by global vehicle sales volume after Volkswagen (VLKAY). In the US market, Toyota faces competition from mainstream automakers (FXD) including Ford (F), General Motors (GM), and Fiat Chrysler (FCAU).

On June 20, Toyota’s ADR (American depositary receipt) breached a key support level near $105.50. Its 14-day relative strength index indicator is at 43.3, suggesting weakness in momentum. The ADR could test its next support near its 52-week low of $98.5 in the coming months.

On June 27, the stock price closed at $104.54, well below its 50-day moving average, which is at $107.03. We can expect its 50-day simple moving average to act as an immediate resistance.

In the next part, we’ll learn what Wall Street analysts are recommending for Toyota before 2Q17 ends.