Toyota Motor (7203) AI Stock Analysis

• Market Cap: ¥45.67T
• Dividend Yield: 2.78%
• Average Volume (3M): 21.69M
• Price to Earnings (P/E): 9.9
• Beta (1Y): 1.51
• Revenue Growth: 6.44%
• EPS Growth: 11.88%
• Country: JP
• Employees: 383,853
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): N/A
• Shares Outstanding: 15,794,987,000
• 10 Day Avg. Volume: 23,861,439
• 30 Day Avg. Volume: 21,690,069
• PEG Ratio: -4.17
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.72
• P/FCF Ratio: -28.73
• 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: ¥3,875.00
• Price Target Upside: 10.59% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: ¥4,033.00 ▲(15.10% Upside)

Toyota's strong earnings call performance and robust financial health are the most significant factors driving the stock score. The company's technical indicators and valuation metrics also contribute positively, indicating a well-rounded investment opportunity despite some regional challenges.

Positive Factors

Diversified revenue streams

Toyota’s mix of vehicle sales, parts/service and a material financial‑services arm creates durable cash inflows across cycles. Financing and after‑sales deliver recurring margin and residual‑value capture, reducing reliance on new‑vehicle volume swings and smoothing long‑term earnings.

Robust balance sheet and ROE

A manageable debt/equity profile and double‑digit ROE indicate disciplined capital use and financial flexibility. This strength supports multi‑year investments in electrification, R&D and capacity while preserving the ability to absorb shocks or fund strategic initiatives without excessive refinancing risk.

Electrified vehicle momentum and scale

Nearly half of sales electrified and multi‑million unit volumes show Toyota’s product competitiveness and scale in HEVs/EVs. High HEV adoption supports margins and brand loyalty, positioning Toyota to capture secular electrification demand while leveraging existing platforms and global manufacturing scale.

Negative Factors

Low free cash flow relative to income

A very low FCF-to-net‑income ratio implies limited distributable cash despite accounting profits. That constraint can restrict sustained capex for batteries and EV platforms, limit strategic M&A or shareholder returns, and force tougher multi‑period capital allocation tradeoffs.

Tariff exposure in North America

A JPY 1.45 trillion hit from tariffs reveals material exposure to trade policy. Persistent or recurring tariffs are a structural margin risk that can necessitate costly supply‑chain reconfiguration, local production shifts, or price adjustments, reducing long‑run North American profitability.

Certification and capacity constraints

Certification failures and constrained capacity that raise breakeven volumes create structural production and cost risks. Higher fixed costs and limited ability to scale electrified models can delay margin recovery and hamper timely fulfillment of demand during the multi‑year EV transition.

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 generates revenue primarily through the sale of vehicles, which includes passenger cars, trucks, and SUVs. The company also earns significant income from its financial services division, which provides financing solutions for customers and dealerships, including loans and leasing options. Additionally, Toyota has a growing revenue stream from its investment in hybrid and electric vehicle technology, as well as from partnerships in research and development for sustainable transportation solutions. Key partnerships with technology firms and collaborations in various markets further enhance its earning potential, while its strong brand reputation contributes to consistent sales across global markets.

Toyota Motor Financial Statement Overview

Summary

Toyota Motor demonstrates strong financial health with consistent revenue growth and solid profitability margins. The balance sheet is robust, with manageable leverage and effective equity utilization. Cash flow generation has improved significantly, although the low free cash flow to net income ratio indicates potential constraints on capital allocation.

Income Statement

Toyota Motor's income statement shows strong financial performance with a consistent revenue growth rate of 1.93% in the TTM period. The company maintains healthy margins, with a gross profit margin of 19.29% and a net profit margin of 8.82%. The EBIT margin stands at 11.45%, indicating efficient operational management. However, there is a slight decline in margins compared to the previous annual report, which could be a point of concern if the trend continues.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.07, indicating a balanced approach to leveraging. The return on equity (ROE) is 12.02%, showcasing effective use of equity to generate profits. The equity ratio is strong, suggesting a solid asset base. However, the slight increase in debt levels over the periods requires monitoring to ensure it doesn't impact financial flexibility.

Cash Flow

Toyota's cash flow statement reveals a significant improvement in free cash flow, with a growth rate of 58.42% in the TTM period. The operating cash flow to net income ratio is 0.17, indicating good cash generation relative to net income. However, the free cash flow to net income ratio is low at 3.62%, suggesting limited free cash flow relative to net income, which could constrain investment opportunities.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	49.39T	48.04T	45.10T	37.15T	31.38T	27.21T
Gross Profit	8.88T	9.58T	9.37T	6.31T	5.97T	4.83T
EBITDA	8.25T	8.27T	8.39T	5.19T	5.30T	4.27T
Net Income	4.63T	4.77T	4.94T	2.45T	2.85T	2.25T
Balance Sheet
Total Assets	97.57T	93.60T	90.11T	74.30T	67.69T	62.27T
Cash, Cash Equivalents and Short-Term Investments	16.92T	15.92T	14.11T	9.23T	8.62T	9.32T
Total Debt	39.86T	38.79T	36.56T	29.38T	26.50T	25.66T
Total Liabilities	59.12T	56.72T	54.87T	45.04T	40.53T	37.98T
Stockholders Equity	37.49T	35.92T	34.22T	28.34T	26.25T	23.40T
Cash Flow
Free Cash Flow	280.25B	-1.21T	-842.02B	-750.76B	-107.63B	-1.04T
Operating Cash Flow	4.82T	3.70T	4.21T	2.96T	3.72T	2.73T
Investing Cash Flow	-4.62T	-4.19T	-5.00T	-1.60T	-577.50B	-4.68T
Financing Cash Flow	124.92B	197.24B	2.50T	-56.18B	-2.47T	2.74T

Toyota Motor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3504.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• 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 3504 is above the 20-day moving average (MA) of 3501.95, above the 50-day MA of 3335.46, and above the 200-day MA of 2895.42, indicating a bullish trend. The MACD of 36.35 indicates Positive momentum. The RSI at 53.16 is Neutral, neither overbought nor oversold. The STOCH value of 29.53 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	80 Outperform	¥45.67T	9.89	12.89%	2.78%	6.44%	11.88%
7270	76 Outperform	¥2.38T	9.16	9.73%	3.61%	1.04%	-31.52%
7269	72 Outperform	$4.13T	10.38	12.95%	1.85%	2.99%	9.99%
7261	65 Neutral	¥747.34B	22.35	1.72%	4.52%	-0.83%	-75.20%
7267	63 Neutral	¥6.35T	10.38	5.23%	4.41%	-0.43%	-26.68%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7201	49 Neutral	¥1.32T	-1.44	-16.69%	―	-3.01%	-755.71%

Toyota Motor Corporate Events

Toyota Lifts Cap on Share Buyback Tender to ¥4.34 Trillion and Updates Pricing Formula

Toyota Motor Corporation has revised the terms of its planned tender offer for its own shares, adjusting the formula used to set the tender offer price and increasing the ceiling for the total repurchase amount to up to ¥4.34 trillion. The company will continue to base the offer price on a 10% discount to the lower of the most recent closing price or one-month average of its Tokyo Stock Exchange Prime Market share price, but it has raised the maximum reference price from ¥2,691 to ¥3,641 per share, reflecting the higher recent trading level of its stock and preserving the principle of using a recent market-based price while seeking to protect the interests of shareholders who do not tender their shares.

The most recent analyst rating on (JP:7203) stock is a Hold with a Yen3424.00 price target. To see the full list of analyst forecasts on Toyota Motor stock, see the JP:7203 Stock Forecast page.

Toyota Navigates Market Challenges in FY2026 Q2 Results

Toyota’s FY2026 second-quarter financial results highlight the company’s focus on navigating various economic and market challenges. The release outlines potential risks and uncertainties that could impact Toyota’s performance, such as currency fluctuations, regulatory changes, and supply chain issues, emphasizing the company’s strategic efforts to maintain its market position and operational efficiency.

The most recent analyst rating on (JP:7203) stock is a Buy with a Yen3468.00 price target. To see the full list of analyst forecasts on Toyota Motor stock, see the JP:7203 Stock Forecast page.

Toyota Reports FY2026 Semi-Annual Financial Results with Mixed Performance

Toyota Motor Corporation reported its FY2026 semi-annual financial results, showing a 5.8% increase in sales revenues compared to the previous year. However, the company experienced a decline in operating income by 18.6% and net income by 1.1%, attributed in part to the negative impact of U.S. tariffs. Despite these challenges, Toyota’s comprehensive income increased significantly by 45.5%, indicating resilience in its financial performance. The company also announced an increase in cash dividends for FY2026, reflecting confidence in its future earnings potential.

The most recent analyst rating on (JP:7203) stock is a Buy with a Yen3468.00 price target. To see the full list of analyst forecasts on Toyota Motor stock, see the JP:7203 Stock Forecast page.