Toyota Motor (7203) AI Stock Analysis

• Market Cap: ¥44.63T
• Dividend Yield: 2.77%
• Average Volume (3M): 21.69M
• Price to Earnings (P/E): 9.7
• Beta (1Y): 1.52
• 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: ¥3,550.00
• Price Target Upside: 3.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 80 Outperform
• Price Target: ¥3,615.00 ▲(5.58% 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

Electrified Vehicle Sales Growth

Toyota's focus on electrification aligns with global sustainability trends, enhancing its competitive edge in the growing EV market.

Strong Vehicle Sales

Robust vehicle sales growth indicates strong demand and market presence, supporting long-term revenue stability and expansion.

Local Manufacturing Commitment

Commitment to local manufacturing strengthens Toyota's supply chain resilience and enhances its competitive positioning globally.

Negative Factors

Rising Debt Levels

Increased debt levels may strain financial flexibility, potentially impacting Toyota's ability to invest in future growth initiatives.

Cash Flow Management Challenges

Challenges in converting earnings into free cash flow could limit Toyota's capacity to fund operations and strategic investments.

Impact of U.S. Tariffs

Tariff impacts on income highlight geopolitical risks that could affect Toyota's profitability and market strategy in North America.

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 revenue growth and profitability, supported by efficient operational management. The balance sheet is stable with a balanced capital structure, though rising debt levels warrant attention. Cash flow management presents challenges, particularly in converting earnings into free cash flow, which could impact future financial flexibility.

Income Statement

Toyota Motor shows strong financial performance with a consistent revenue growth trend, highlighted by a TTM revenue growth rate of 86.5%. The company maintains healthy profitability margins, with a gross profit margin of 19.94% and a net profit margin of 9.92% in the TTM period. The EBIT and EBITDA margins are also robust at 12.52% and 17.21%, respectively, indicating efficient operational management. However, there is a slight decline in gross profit and net income compared to the previous annual report, which should be monitored.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 1.08, which is manageable for the industry. The return on equity is strong at 13.43%, indicating effective use of shareholder funds. The equity ratio stands at 38.54%, suggesting a balanced capital structure. However, the increase in total debt over the periods could pose a risk if not managed carefully.

Cash Flow

Toyota's cash flow statement reveals challenges in free cash flow management, with a significant negative growth rate of -113.92% in the TTM period. The operating cash flow to net income ratio is 0.13, which is relatively low, indicating potential cash flow constraints. The free cash flow to net income ratio is negative, reflecting issues in converting profits into free cash flow. These factors suggest a need for improved cash flow management.

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: 3424.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 3424 is above the 20-day moving average (MA) of 3164.05, above the 50-day MA of 3110.48, and above the 200-day MA of 2774.86, indicating a bullish trend. The MACD of 76.24 indicates Negative momentum. The RSI at 71.51 is Negative, neither overbought nor oversold. The STOCH value of 92.00 is Negative, 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	¥44.63T	9.66	12.89%	2.77%	6.44%	11.88%
6201	74 Outperform	¥5.53T	26.18	3.94%	0.79%	2.91%	-11.26%
7269	72 Outperform	¥4.57T	11.50	12.95%	1.84%	2.99%	9.99%
7261	65 Neutral	$761.82B	22.78	1.72%	4.55%	-0.83%	-75.20%
7267	63 Neutral	¥6.36T	10.40	5.23%	4.43%	-0.43%	-26.68%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
7201	49 Neutral	¥1.39T	-1.52	-16.69%	―	-3.01%	-755.71%

Toyota Motor Corporate Events

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.

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.

Toyota Updates on Share Repurchase Plans Amid Regulatory Delays

Toyota Motor Corporation has announced an update regarding its planned tender offer for its own shares, contingent on the successful completion of a tender offer for Toyota Industries Corporation by Toyota Fudosan Co., Ltd., an affiliated company. The commencement of the tender offer for Toyota Industries has been delayed to February 2026 due to necessary regulatory procedures, pushing Toyota’s own share repurchase plan to March 2026 or later, pending board approval. This strategic move could impact Toyota’s market positioning and shareholder value.

Toyota Submits Fourth Progress Report on Certification Reforms

Toyota Motor Corporation has submitted its fourth progress report to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) regarding measures to prevent recurrence of model certification application issues. This report follows a correction order from MLIT, which highlighted the need for reforms in management involvement, regulations, record-keeping, and human resource development. Toyota has been implementing strategies such as strengthening foundations, monozukuri, and human development to ensure compliance and improve operations. The company is focusing on on-site management and systematic human resource development to address these issues effectively.