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Reading the Analysts’ Yuletide Ratings for Toyota This Year

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Toyota Motor

In 2016, Toyota Motor’(TM) global sales volumes were second-highest after those of Volkswagen (VLKAY). Toyota became world’s largest automaker by volume in 2008 for the first time.

Interestingly, TM was able to jump into that position while being younger than legacy US auto peers (IYK) General Motors (GM) and Ford Motor (F).

Toyota Motor: analysts’ ratings

According to the data collected by Thomson Reuters, ~38% of the 24 analysts covering Toyota recommend a “buy” for the stock, while 50% recommend a “hold,” and 12% recommend a “sell.”

The analysts’ 12-month consensus target price for Toyota’s ADR (American depository receipts) is $125.87. This target price reflects minor upside potential of 1.3% from its current market price of $124.25 on the New York Stock Exchange.

Unlike GM, TM’s consensus target price doesn’t show much upside potential, but the analysts’ consensus target price for Toyota in November has risen significantly to $125.87 from $110.53 a couple of months ago.

What could drive optimism?

Last month, Toyota released its earnings results for fiscal 2Q18 ended September 30, 2017. The company’s earnings for the quarter rose 19% YoY (year-over-year), while its 2Q18 revenues rose ~10%, despite the stagnation in its consolidated vehicle sales.

Toyota’s management revised its fiscal 2018 guidance upward during its fiscal 2Q18 earnings event. This could be the primary reason that analysts have revised their target prices for Toyota upward over the past two months.

Now let’s see what analysts are recommending for Toyota’s home-market peer, Honda Motor (HMC).

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