Toyota Motor (7203) AI Stock Analysis

• Market Cap: ¥36.36T
• Dividend Yield: 3.24%
• Average Volume (3M): 35.34M
• Price to Earnings (P/E): 7.2
• Beta (1Y): 1.57
• Revenue Growth: 6.94%
• EPS Growth: 15.37%
• Country: JP
• Employees: 384,338
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Auto - Manufacturers
• EPS (TTM): 51.61
• Shares Outstanding: 15,794,987,000
• 10 Day Avg. Volume: 29,821,109
• 30 Day Avg. Volume: 35,343,499
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ¥3,060.00
• Price Target Upside: 13.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

Toyota Motor's stock is fundamentally strong, supported by robust financial performance with effective cost management and a stable financial structure. The company's valuation is attractive due to a low P/E ratio and a solid dividend yield, making it appealing for value and income investors. Technical indicators provide a mixed outlook, with some suggesting caution. Overall, Toyota is well-positioned, though investors should monitor cash flow challenges closely.

Positive Factors

Market Reaction

The stock gained 3% following the guidance hike, showing a positive market reaction.

Profit Guidance

Toyota lifted FY3/25 operating profit guidance, mainly due to positive forex influence and marketing initiatives.

Sales Performance

Hybrids and xEV sales of 1m (+53%) represents a sales mix of 43%, at all-time highs.

Negative Factors

Currency Exposure

Toyota has c.50% revenue exposure in USD and EUR; Weakening USD/EUR against the JPY may lead to downside to its earnings.

Earnings Miss

Toyota reported a sharp earnings miss due to exceptional valuation losses in foreign currency-denominated assets.

Production Plan

The FY3/25 production plan was revised down from 10mn units to 9.7mn, a 3% decrease.

Toyota Motor Business Overview & Revenue Model

Company Description

Toyota Motor Corporation designs, manufactures, assembles, and sells passenger vehicles, minivans and commercial vehicles, and related parts and accessories. It operates in Automotive, Financial Services, and All Other segments. The company offers hybrid cars under the Prius name, fuel cell vehicles under the MIRAI name; and conventional engine vehicles, including subcompact and compact cars under the Corolla and Raize names. It also provides mini-vehicles, passenger vehicles, commercial vehicles, and auto parts under the Toyota name; mid-size cars; luxury cars; sports cars under the GR Yaris, Corolla Sport, Corolla Cross, and Supra names; and recreational and sport-utility vehicles under the Highlander name. In addition, the company offers pickup trucks under the Tacoma name; minivans; and trucks and buses. Further, it provides financial services, such as retail financing and leasing, wholesale financing, insurance, and credit cards; and designs, manufactures, and sells prefabricated housing. Additionally, the company operates GAZOO.com, a web portal for automobile information. It operates in Japan, North America, Europe, Asia, Central and South America, Oceania, Africa, and the Middle East. The company was founded in 1933 and is headquartered in Toyota, Japan.

How the Company Makes Money

Toyota Motor Corporation generates revenue primarily through the sale of automobiles and automotive parts. Key revenue streams include sales of its diverse range of vehicles, which span from fuel-efficient compact cars to luxury vehicles and commercial trucks. The company also earns income from its financing operations, offering loans and leases to customers and dealerships through its financial services arm. Additionally, Toyota benefits from strategic partnerships and joint ventures globally, which help expand its manufacturing capabilities and market reach. Its focus on innovation in hybrid and electric vehicles continues to be a significant growth driver, as global demand for environmentally friendly transportation solutions rises.

Toyota Motor Financial Statement Overview

Summary

Toyota Motor's overall financial performance is robust, underpinned by strong revenue growth and profitability. The income statement highlights effective cost management and revenue generation, while the balance sheet demonstrates a stable financial structure with prudent leverage. Despite challenges in free cash flow, operational cash generation remains strong, pointing to effective cash management. The company is well-positioned to navigate industry dynamics with its strong financial foundation.

Income Statement

Toyota's income statement shows strong financial performance, with a notable gross profit margin of 20.30% and a net profit margin of 10.90% for TTM (Trailing-Twelve-Months). The company has demonstrated consistent revenue growth, with a TTM revenue growth rate of 3.67% compared to the previous year. EBIT and EBITDA margins are also healthy at 10.25% and 15.24% respectively, indicating efficient operational management.

Balance Sheet

The balance sheet reflects a solid financial position with a debt-to-equity ratio of 1.10, suggesting a balanced approach to leverage. Return on Equity (ROE) is strong at 14.19% for TTM, highlighting effective use of equity to generate profits. The equity ratio stands at 37.92%, indicating a substantial portion of the company’s assets is financed by equity, contributing to financial stability.

Cash Flow

Toyota's cash flow statement reveals challenges with free cash flow, which is negative at -160.08 billion for TTM. However, the operating cash flow to net income ratio is strong at 0.83, suggesting operational cash generation is aligned with profitability. Despite the negative free cash flow, the company maintains positive operating cash flow, reflecting good cash management practices.

Breakdown
Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
45.10T	37.15T	31.38T	27.21T	29.93T
	Gross Profit
9.37T	6.31T	5.97T	4.83T	5.41T
	EBIT
5.35T	3.67T	3.00T	2.96T	2.44T
	EBITDA
8.39T	5.19T	4.82T	4.61T	4.13T
	Net Income Common Stockholders
4.94T	2.45T	2.85T	2.25T	2.04T
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
14.11T	9.23T	8.62T	9.32T	5.70T
	Total Assets
90.11T	74.30T	67.69T	62.27T	52.68T
	Total Debt
36.56T	29.38T	26.50T	25.66T	20.55T
	Net Debt
27.15T	21.86T	20.38T	20.56T	16.36T
	Total Liabilities
54.87T	45.04T	40.53T	37.98T	31.94T
	Stockholders Equity
34.22T	28.34T	26.25T	23.40T	20.06T
Cash Flow		Free Cash Flow
-842.02B	-750.76B	-107.63B	-1.04T	-4.49B
	Operating Cash Flow
4.21T	2.96T	3.72T	2.73T	3.59T
	Investing Cash Flow
-5.00T	-1.60T	-577.50B	-4.68T	-3.15T
	Financing Cash Flow
2.50T	-56.18B	-2.47T	2.74T	397.14B

Toyota Motor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2706.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7203, the sentiment is Positive. The current price of 2706 is above the 20-day moving average (MA) of 2554.28, above the 50-day MA of 2647.75, and above the 200-day MA of 2677.18, indicating a bullish trend. The MACD of 33.88 indicates Negative momentum. The RSI at 54.86 is Neutral, neither overbought nor oversold. The STOCH value of 76.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7203.

Toyota Motor Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7203	78 Outperform	¥36.36T	7.25	14.89%	3.24%	6.94%	15.37%
Sector *	61 Neutral	$6.58B	11.81	3.06%	3.99%	2.54%	-21.54%

Toyota Motor Corporate Events

Toyota Addresses Privatization Speculation

Toyota Motor Corporation has addressed media reports suggesting its potential involvement in the privatization of Toyota Industries Corporation. While the company is exploring various investment possibilities, no definitive decisions have been made, and any significant developments will be announced promptly.

Toyota Reports Hino Motors’ Financial Discrepancies

Toyota Motor Corporation announced a difference in the non-consolidated financial results of its subsidiary, Hino Motors, Ltd., for the fiscal year ending March 31, 2025, compared to the previous year. Despite a significant increase in net sales, Hino Motors reported a substantial loss, but Toyota expects this to have an immaterial impact on its consolidated results. This announcement highlights the challenges faced by Hino Motors, which may affect its financial stability and stakeholder confidence.

Toyota Clarifies Media Reports on Subsidiary Integration

Toyota Motor Corporation addressed media reports about a potential business integration involving one of its subsidiaries, clarifying that no final decisions have been made. The company emphasized that details such as the agreement, investment ratios, and other specifics are yet to be determined, and any significant developments will be announced promptly.

Toyota Completes Major Share Repurchase Initiative

Toyota Motor Corporation has completed a significant repurchase of its common stock, acquiring over 16 million shares for approximately JPY 39.9 billion between April 1 and April 15, 2025. This repurchase is part of a larger initiative authorized by the board of directors to buy back up to 530 million shares, with a maximum expenditure of JPY 1.2 trillion, aimed at enhancing shareholder value and optimizing capital structure.

Toyota Announces Significant Share Repurchase in March 2025

Toyota Motor Corporation announced the repurchase of over 13 million shares of its common stock in March 2025, amounting to approximately JPY 37.7 billion. This move is part of a larger share repurchase initiative authorized by the board, aiming to repurchase up to 530 million shares by April 2025, potentially impacting shareholder value and market perception positively.

Toyota Introduces Share-Based Compensation Plan for Senior Employees

Toyota Motor Corporation has announced the introduction of a share-based compensation plan using an ESOP trust structure for senior employees. This initiative aims to align employees with management goals, enhancing corporate value and supporting the company’s transformation during a significant industry shift.

Toyota Introduces Shareholder Benefit Program to Reward Long-Term Investors

Toyota Motor Corporation has announced the introduction of a shareholder benefit program aimed at rewarding long-term shareholders and encouraging them to hold shares for extended periods. Eligible shareholders will receive credits through the TOYOTA Wallet application based on the number of shares held and the duration of their holding period, with additional opportunities to win prizes. This initiative is expected to strengthen shareholder loyalty and deepen investors’ understanding of Toyota’s business operations.

Toyota Announces Executive Restructuring to Boost Efficiency

Toyota Motor Corporation announced changes to its executive and senior management structure, effective April 1, 2025. These changes are aimed at enhancing the company’s operational efficiency and strategic direction. The restructuring includes new roles and responsibilities for key executives, reflecting Toyota’s commitment to digital transformation and competitive growth in the automotive industry.

Toyota Announces Changes in Leadership Roles

Toyota Motor Corporation announced changes in its representative directors, which were decided at a recent Board of Directors meeting. These changes, which involve shifts in duties and responsibilities among key executives, are part of an effort to adjust the authority of representation within the company. The formal appointments will be finalized following the 121st Ordinary General Shareholders’ Meeting, reflecting Toyota’s strategic approach to leadership and governance.

Toyota Transitions to Strengthen Board Governance

Toyota Motor Corporation announced its decision to transition from a company with an Audit and Supervisory Board to one with an Audit and Supervisory Committee, aiming to reinvigorate its Board of Directors. This change is expected to enhance decision-making speed and strengthen the board’s monitoring functions, aligning with Toyota’s goal of transforming into a mobility company and ensuring long-term corporate value enhancement.

Toyota Announces Substantial Share Repurchase to Boost Shareholder Value

Toyota Motor Corporation announced the repurchase of over 15 million shares of its common stock in January 2025, as part of a larger share buyback plan initiated in 2024. This strategic move reflects Toyota’s commitment to enhancing shareholder value, and it indicates strong financial health, potentially influencing its market position and investor confidence positively.