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Most Analysts Suggest ‘Holds’ on Toyota after Its Weak Outlook

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Analysts’ views on Toyota

According to the latest data compiled by Thomson Reuters, of the 22 analysts covering Toyota Motor (TM), 45% have given the stock “buy” recommendations, and 50% of analysts have given it “hold” recommendations. The remaining 5% of analysts have given it “sell” recommendations.

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Upside potential

On May 16, analysts’ consensus 12-month target price for Toyota’s ADR (American depositary receipt) was $136.94 on the NYSE. This consensus target was already lower than its market price of $137.35.

In the last couple of months, Wall Street analysts’ opinion hasn’t changed much on Toyota. Risks due to the appreciating Japanese yen could affect the company’s upcoming earnings, which could be the primary reason behind analysts’ cautionary approach.

In addition, softening US auto sales could hamper TM’s overseas revenue in fiscal 2019. It’s important to pay attention to analysts’ ratings. If popular analysts change their views on a stock, a significant short-term movement in the stock could follow.

Peer comparison

Analysts’ recommendations and 12-month return potentials for Toyota’s peers (FXD) are as follows:

  • General Motors (GM): 50% have recommended “buys,” and the stock has a ~25% upside potential
  • Ford Motor Company (F): 13% have recommended “buys,” and the stock has an ~8% upside potential
  • Fiat Chrysler Automobiles (FCAU): 42% have recommended “buys,” and the stock has an impressive upside potential of ~45%

Read on to the next part of this series, where we’ll look at some key support and resistance levels in Toyota’s ADR.

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