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Toyota Motor (JP:7203)
:7203

Toyota Motor (7203) AI Stock Analysis

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Toyota Motor

(LSE:7203)

Rating:75Outperform
Price Target:
¥2,982.00
▲(18.01%Upside)
Toyota's financial strength and attractive valuation are key strengths, offset by technical neutrality and mixed earnings call insights. Cash flow challenges and operational setbacks in key markets also weigh on the score.
Positive Factors
Market Leadership
Toyota is the market leader for hybrid cars, offering a significant competitive advantage with the largest global automobile market share of 11.5%.
New Product Launches
Positive catalysts for Toyota include 24 new product launches, major product releases in China, and commencement of US battery production.
Strategic Investments
Toyota is to acquire Hino's Hamura plant, which management views as a key plant for frame-based vehicle production.
Negative Factors
Currency Exposure
Weakening USD/EUR against JPY may lead to downside risks for Toyota's earnings due to its 50% revenue exposure in these currencies.
Demand Risks
Toyota faces demand risks related to China and mass-market sales, along with elevated raw material costs posing headwinds to earnings.
Earnings Miss
Toyota reported a sharp earnings miss due to exceptional valuation losses in foreign currency-denominated assets.

Toyota Motor (7203) vs. iShares MSCI Japan ETF (EWJ)

Toyota Motor Business Overview & Revenue Model

Company DescriptionToyota 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 MoneyToyota 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 Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q4-2025)
|
% Change Since: -6.61%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant achievements like increased electrified vehicle sales, strong operating income, and a positive outlook for future sales. However, these were balanced by challenges such as a forecasted decrease in operating income, impacts from U.S. tariffs, and operational setbacks in North America and China.
Q4-2025 Updates
Positive Updates
Strong Operating Income Despite Challenges
For the fiscal year ended March 2025, the operating income was JPY4.8 trillion, achieved through price revisions, controlling incentives, and expansion of value chain profits.
Increased Electrified Vehicle Sales
The proportion of electrified vehicle sales was 46.2%, a significant increase from the previous fiscal year, mainly driven by an increase of 850,000 hybrid electric vehicles.
Record High Dividends
The dividend for the fiscal year ended March 2025 increased by JPY15 to JPY90, with a forecasted further increase by JPY5 for the next fiscal year.
Positive Outlook for Future Vehicle Sales
Consolidated vehicle sales for the fiscal year ending March 2026 are expected to reach 9.8 million units, representing a 104.7% increase from the previous fiscal year.
Growth in Financial Services Business
Operating income in the Financial Services business increased due to an increase in loan balances.
Continued Investment in Future Growth
The company plans to invest JPY470 billion in comprehensive investment to strengthen the management foundation and develop new profit pillars.
Negative Updates
Decrease in Operating Income Forecast
The operating income forecast for the fiscal year ending March 2026 is JPY3.8 trillion, a decrease from the previous year's JPY4.8 trillion.
Impact of U.S. Tariffs
The estimated impact of U.S. tariffs for April and May 2025 is JPY180 billion, with further impacts uncertain but potentially significant.
Challenges in North America
Operating income decreased in North America due to a four-month shutdown of Toyota Motor manufacturing in Indiana, USA.
Decreased Profits in China
Operating income from China decreased due to increased sales expenses.
Supply Constraints Affecting Sales
Toyota and Lexus vehicle sales were affected by supply constraints due to certification issues, maintaining only 99.7% of previous fiscal year sales.
Company Guidance
During the call discussing the fiscal year ending March 2025, Toyota reported an operating income of JPY4.8 trillion, driven by price revisions, expansion of value chain profits, and comprehensive investments. The company forecasted an operating income of JPY3.8 trillion for the fiscal year ending March 2026, despite anticipating challenges such as U.S. tariffs, which were estimated to have an impact of JPY180 billion in April and May 2025. The full-year dividend for fiscal 2025 was JPY90, representing a JPY15 increase from the previous year. Toyota also highlighted a significant increase in electrified vehicle sales, reaching 46.2% of total sales. For fiscal 2026, Toyota expects consolidated vehicle sales to be 9.8 million units, a 4.7% increase from the previous year, with electrified vehicle sales projected to account for 49.8% of total sales. Despite challenges, Toyota emphasized its commitment to maintaining a policy of stable dividend increases and strengthening its management foundation for sustainable growth.

Toyota Motor Financial Statement Overview

Summary
Toyota Motor demonstrates strong revenue growth and profitability with a solid balance sheet. However, the negative free cash flow highlights cash management challenges.
Income Statement
85
Very Positive
Toyota Motor shows a strong income statement with consistent revenue growth, evidenced by a 6.53% increase from 2024 to 2025. The gross profit margin for 2025 is 19.94%, which indicates healthy profitability. The net profit margin remains robust at 9.92%. However, there was a slight decline in EBIT margin from 11.87% to 9.98%, reflecting potential cost pressures.
Balance Sheet
80
Positive
The company maintains a stable balance sheet with a debt-to-equity ratio of 1.08, which is reasonable for the auto industry. The equity ratio is 38.38%, indicating a well-capitalized structure. ROE is strong at 13.27%, showcasing effective management of equity capital. The balance sheet reflects a solid financial foundation despite the increase in total debt.
Cash Flow
70
Positive
Cash flow analysis reveals challenges, as the free cash flow remains negative, although it improved slightly from the previous year. The operating cash flow to net income ratio is 0.78, suggesting effective cash generation relative to earnings. However, the free cash flow to net income ratio is negative, indicating potential issues in covering capital expenditures.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue48.04T45.10T37.15T31.38T27.21T
Gross Profit9.58T9.37T6.31T5.97T4.83T
EBITDA7.04T8.39T5.19T4.82T4.61T
Net Income4.77T4.94T2.45T2.85T2.25T
Balance Sheet
Total Assets93.60T90.11T74.30T67.69T62.27T
Cash, Cash Equivalents and Short-Term Investments8.98T11.58T7.22T6.79T9.32T
Total Debt38.79T36.56T29.38T26.50T25.66T
Total Liabilities56.72T54.87T45.04T40.53T37.98T
Stockholders Equity35.92T34.22T28.34T26.25T23.40T
Cash Flow
Free Cash Flow-1.21T-842.02B-750.76B-107.63B-1.04T
Operating Cash Flow3.70T4.21T2.96T3.72T2.73T
Investing Cash Flow-4.19T-5.00T-1.60T-577.50B-4.68T
Financing Cash Flow197.24B2.50T-56.18B-2.47T2.74T

Toyota Motor Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price2527.00
Price Trends
50DMA
2629.43
Negative
100DMA
2660.03
Negative
200DMA
2656.14
Negative
Market Momentum
MACD
-47.27
Positive
RSI
43.79
Neutral
STOCH
30.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7203, the sentiment is Neutral. The current price of 2527 is below the 20-day moving average (MA) of 2581.75, below the 50-day MA of 2629.43, and below the 200-day MA of 2656.14, indicating a bearish trend. The MACD of -47.27 indicates Positive momentum. The RSI at 43.79 is Neutral, neither overbought nor oversold. The STOCH value of 30.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7203.

Toyota Motor Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
¥32.97T7.0313.59%4.07%6.52%-1.47%
66
Neutral
£1.85B11.506.20%3.01%0.63%-17.57%
$47.37B8.296.54%4.50%
$3.89B5.266.30%6.78%
$8.41B12.42-12.13%7.12%
$23.72B8.1415.02%2.33%
$35.15B20.244.70%1.69%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:7203
Toyota Motor
2,527.00
-651.62
-20.50%
HNDAF
Honda Motor Co
9.74
-0.75
-7.15%
MZDAF
Mazda Motor
6.25
-3.09
-33.08%
NSANF
Nissan Motor Co
2.46
-0.94
-27.65%
SZKMF
Suzuki Motor
11.52
0.43
3.88%
TYIDF
Toyota
113.75
30.81
37.15%

Toyota Motor Corporate Events

Toyota Announces Leadership and Structural Changes
Jun 12, 2025

Toyota Motor Corporation announced changes to its board members, executive structure, and senior management, effective July 1, 2025. These changes include new appointments to the board of directors and adjustments in executive roles, which are expected to impact the company’s strategic direction and governance.

The most recent analyst rating on (JP:7203) stock is a Buy with a Yen3800.00 price target. To see the full list of analyst forecasts on Toyota Motor stock, see the JP:7203 Stock Forecast page.

Toyota Announces Strategic Business Integration with Hino and Mitsubishi Fuso
Jun 10, 2025

Toyota Motor Corporation has announced a significant business integration involving its subsidiary, Hino Motors, and Mitsubishi Fuso Truck and Bus Corporation, a subsidiary of Daimler Truck AG. This integration will result in the formation of a new holding company, leading to Hino ceasing to be a consolidated subsidiary of Toyota. This strategic move is expected to reshape Toyota’s operations and influence its market positioning, potentially impacting stakeholders and the broader automotive industry.

The most recent analyst rating on (JP:7203) stock is a Buy with a Yen3800.00 price target. To see the full list of analyst forecasts on Toyota Motor stock, see the JP:7203 Stock Forecast page.

Toyota Announces Share Repurchase Plan to Boost Shareholder Value
Jun 3, 2025

Toyota Motor Corporation announced its intention to conduct a share repurchase through a tender offer for its own shares, as part of its strategy to enhance shareholder returns and corporate value. This move is aligned with Toyota’s broader goal of investing in future growth, particularly in environmental and safety technologies, to maintain competitiveness and support stakeholders including employees, business partners, and local communities.

The most recent analyst rating on (JP:7203) stock is a Buy with a Yen3800.00 price target. To see the full list of analyst forecasts on Toyota Motor stock, see the JP:7203 Stock Forecast page.

Toyota Addresses Media Speculation on Privatization Move
Jun 2, 2025

Toyota Motor Corporation has addressed media reports regarding a potential decision on the privatization of Toyota Industries Corporation. The reports suggested a significant financial transaction, which Toyota clarified was not disclosed by them. The company plans to make an official decision soon and will announce it promptly, highlighting the importance of accurate information dissemination for stakeholders.

The most recent analyst rating on (JP:7203) stock is a Buy with a Yen3800.00 price target. To see the full list of analyst forecasts on Toyota Motor stock, see the JP:7203 Stock Forecast page.

Toyota Submits Third Progress Report on Certification Compliance
May 30, 2025

Toyota Motor Corporation has submitted its third quarterly progress report to Japan’s Ministry of Land, Infrastructure, Transport and Tourism, detailing measures to prevent recurrence of model certification application issues. The report highlights Toyota’s commitment to strengthening its operational foundations, improving its manufacturing processes, and enhancing human resource development to ensure compliance and efficiency. These efforts are aimed at addressing past regulatory challenges and reinforcing Toyota’s position as a responsible industry leader.

The most recent analyst rating on (JP:7203) stock is a Buy with a Yen3800.00 price target. To see the full list of analyst forecasts on Toyota Motor stock, see the JP:7203 Stock Forecast page.

Toyota Motor Corporation FY2025 Financial Results Overview
May 8, 2025

Toyota Motor Corporation’s FY2025 financial results highlight the company’s ongoing efforts to adapt to changing economic conditions, market demands, and regulatory environments across its global operations. The release underscores the potential impacts of various factors such as currency fluctuations, supply chain dependencies, and geopolitical instabilities on Toyota’s performance, emphasizing the company’s strategic focus on maintaining production efficiencies and market competitiveness.

Toyota Proposes Amendments to Strengthen Governance Structure
May 8, 2025

Toyota Motor Corporation has announced a proposal to amend its Articles of Incorporation, transitioning from a company with an Audit and Supervisory Board to one with an Audit and Supervisory Committee. This change aims to enhance board discussions, promote faster decision-making, and strengthen the monitoring functions of the Board of Directors, potentially impacting the company’s governance and operational efficiency.

Toyota’s FY2025 Financial Results: Sales Up, Profits Down
May 8, 2025

Toyota Motor Corporation reported its consolidated financial results for FY2025, showing a 6.5% increase in sales revenues but a decline in operating income and net income compared to the previous year. Despite the increase in sales, the company faced challenges with a decrease in comprehensive income by 43.7% and a reduction in earnings per share. The results indicate a challenging year for Toyota, with implications for its financial stability and market positioning, as it navigates through a competitive automotive industry landscape.

Toyota Announces Treasury Stock Disposal to Boost Corporate Value
May 8, 2025

Toyota Motor Corporation has announced a decision to dispose of its treasury stock under a restricted stock compensation plan aimed at enhancing corporate value and aligning management’s interests with those of shareholders. This move reflects Toyota’s strategic focus on long-term growth and governance improvements, potentially impacting its corporate structure and shareholder relations.

Toyota Addresses Privatization Speculation
Apr 26, 2025

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
Apr 24, 2025

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
Apr 22, 2025

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
Apr 18, 2025

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
Apr 3, 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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 06, 2025