Why Most Analysts Recommend ‘Buy’ for Toyota This Month



Analysts favor Toyota

Of the 22 Reuters-surveyed analysts covering Toyota (TM), ~68% recommend “buy,” and 32% recommend “hold.” In September, only 55% of these analysts suggested “buy.”

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Solid upside potential

As of November 28, analysts’ 12-month consensus target price for Toyota ADRs (American depositary receipts) was $143.66, implying a ~18.2% upside to its New York Stock Exchange price of $121.58. Their consensus target price for TM was $137.95 about a month ago.

In 2017, Toyota’s global sales volume was the third highest in the world after the Renault–Nissan–Mitsubishi Alliance’s and Volkswagen’s (VLKAY). Toyota became the world’s largest automaker by volume in 2008 for the first time despite being founded much later than legacy US auto giants (IYK) General Motors (GM) and Ford (F).

Toyota’s US sales

In October, Toyota’s US sales volume rose 1.4% YoY (year-over-year) to 191,102 units, not much lower than Ford’s (F) 192,616 units. In the previous three months, Toyota reported higher US sales than Ford, America’s second-largest automaker.

In the quarter ended September 30, TM’s operating profit rose 10.0% YoY. The company has increased its focus on the US pickup truck segment in the last couple of quarters. During its second-quarter earnings event, TM raised its fiscal 2019 operating profit outlook to 2.0 trillion yen ($17.54 billion) from 1.85 trillion yen, mainly due to the Japanese yen’s weakness against the US dollar. Continue to the next part, where we’ll discuss analysts’ ratings for Honda (HMC) this month.


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