Toyota Motor (7203) AI Stock Analysis

• Market Cap: ¥38.66T
• Dividend Yield: 3.04%
• Average Volume (3M): 25.09M
• Price to Earnings (P/E): 9.1
• Beta (1Y): 1.57
• Revenue Growth: 4.45%
• EPS Growth: -11.43%
• Country: JP
• Employees: 383,853
• Sector: Consumer Cyclical
• Sector Strength: 83
• Industry: Auto - Manufacturers
• EPS (TTM): 64.56
• Shares Outstanding: 15,794,987,000
• 10 Day Avg. Volume: 21,560,929
• 30 Day Avg. Volume: 25,088,443
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: ¥3,216.67
• Price Target Upside: 8.58% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6

• Rating: 79 Outperform
• Price Target: ¥3,349.00 ▲(13.05% Upside)

Toyota Motor's overall stock score is driven by strong financial performance and technical indicators, with a solid valuation supporting the stock's attractiveness. The earnings call highlighted both opportunities and challenges, impacting the score slightly. The company's ability to manage cash flow and address operational challenges will be crucial for sustaining its positive trajectory.

Positive Factors

Hybrid Vehicle Sales

The ongoing acceleration of HEV sales should boost incremental profit margins in the short to mid term.

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%.

Product Launches

Positive catalysts for Toyota include 24 new product launches, major product releases in China, and commencement of US battery production.

Negative Factors

Currency Risks

Weakening USD/EUR against JPY may lead to downside risks for Toyota's earnings due to its 50% revenue exposure in these currencies.

Demand and Costs

Toyota faces demand risks related to China and mass-market sales, along with elevated raw material costs posing headwinds to earnings.

Profit Guidance

While Q1 results significantly exceeded expectations, the company revised down its FY3/26 profit guidance, incorporating a full-year tariff impact of JPY 1,400 bn.

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 makes money primarily through the design, manufacture, and sale of vehicles across multiple global markets. The company's revenue streams are largely derived from its automotive operations, which include the sale of vehicles, parts, and accessories. Additionally, Toyota's financial services arm contributes significantly to its earnings by offering financing, leasing, and insurance services to customers and dealers. The company also invests in new technologies and sustainable mobility solutions, such as hybrid and electric vehicles, which are becoming increasingly important revenue drivers. Strategic partnerships and joint ventures with other automotive and technology firms further bolster Toyota's revenue by enhancing its product offerings and expanding its market reach.

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	48.45T	48.04T	45.10T	37.15T	31.38T	27.21T
Gross Profit	9.35T	9.58T	9.37T	6.31T	5.97T	4.83T
EBITDA	7.78T	8.27T	8.39T	5.19T	5.30T	4.27T
Net Income	4.27T	4.77T	4.94T	2.45T	2.85T	2.25T
Balance Sheet
Total Assets	93.47T	93.60T	90.11T	74.30T	67.69T	62.27T
Cash, Cash Equivalents and Short-Term Investments	15.97T	15.92T	14.11T	9.23T	8.62T	9.32T
Total Debt	38.44T	38.79T	36.56T	29.38T	26.50T	25.66T
Total Liabilities	56.48T	56.72T	54.87T	45.04T	40.53T	37.98T
Stockholders Equity	36.04T	35.92T	34.22T	28.34T	26.25T	23.40T
Cash Flow
Free Cash Flow	176.91B	-1.21T	-842.02B	-750.76B	-107.63B	-1.04T
Operating Cash Flow	4.89T	3.70T	4.21T	2.96T	3.72T	2.73T
Investing Cash Flow	-3.59T	-4.19T	-5.00T	-1.60T	-577.50B	-4.68T
Financing Cash Flow	-287.26B	197.24B	2.50T	-56.18B	-2.47T	2.74T

Toyota Motor Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2962.50
• 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 2962.5 is above the 20-day moving average (MA) of 2887.78, above the 50-day MA of 2711.84, and above the 200-day MA of 2697.75, indicating a bullish trend. The MACD of 49.95 indicates Positive momentum. The RSI at 63.74 is Neutral, neither overbought nor oversold. The STOCH value of 39.24 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	79 Outperform	¥38.66T	9.09	11.91%	3.04%	4.45%	-11.43%
Sector *	61 Neutral	$17.99B	12.87	-3.58%	2.97%	1.27%	-14.28%
HNDAF	―	$54.76B	11.85	5.17%	4.12%	―	―
MZDAF	―	$4.69B	37.62	1.11%	4.93%	―	―
NSANF	―	$8.09B	12.42	-15.23%	5.91%	―	―
SZKMF	―	$26.83B	9.09	13.92%	2.07%	―	―
TYIDF	―	$34.91B	20.19	4.89%	1.64%	―	―

Toyota Motor Corporate Events

Toyota Expands Investment in Woven Capital to Boost Mobility Innovations

Toyota Motor Corporation has announced a significant investment in Woven Capital, L.P., a global investment fund established by its subsidiary Woven by Toyota. This move elevates Woven Capital to a specified subsidiary status, reflecting Toyota’s strategy to enhance its investment business and strengthen partnerships in innovative fields such as mobility, automation, and artificial intelligence. The investment is expected to have minimal impact on Toyota’s business performance but aligns with its goal of transforming into a mobility company and producing happiness for all 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 Announces Leadership and Structural Changes

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

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

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

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

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

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

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

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

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.