Toyota Motor (TM) AI Stock Analysis

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Toyota Motor

(NYSE:TM)

Rating:70Outperform

Price Target:

$189.00

▲(7.55%Upside)

Toyota's overall stock score is bolstered by strong financial performance and attractive valuation. However, technical analysis indicates bearish momentum, and the mixed earnings call outlook suggests caution due to forecasted declines and external challenges.

Toyota Motor (TM) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$227.95B

Dividend Yield3.61%

Average Volume (3M)401.32K

Price to Earnings (P/E)7.5

Beta (1Y)0.86

Revenue Growth1.06%

EPS Growth-7.05%

CountryUS

Employees383,853

SectorConsumer Cyclical

Sector Strength56

IndustryAuto - Manufacturers

Share Statistics

EPS (TTM)3.56

Shares Outstanding1,579,498,800

10 Day Avg. Volume455,850

30 Day Avg. Volume401,324

Financial Highlights & Ratios

PEG Ratio0.31

Price to Book (P/B)0.92

Price to Sales (P/S)0.00

P/FCF Ratio-20.57

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering1

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 design, manufacture, and sale of vehicles. The company's core revenue streams include the sale of passenger cars, commercial vehicles, and related parts and accessories. Additionally, Toyota earns income through its financial services arm, which provides financing and leasing solutions for customers and dealers. The company benefits from strategic partnerships and joint ventures that enhance its global reach and product offerings. Key factors contributing to Toyota's earnings include its focus on innovation, efficiency in manufacturing processes, and a strong global distribution network.

Toyota Motor Key Performance Indicators (KPIs)

Any

Retail Vehicle Sales

Retail Vehicle Sales
Tracks the number of vehicles sold directly to consumers, providing insight into market demand, brand popularity, and competitive positioning in the automotive industry.

Chart InsightsToyota's retail vehicle sales showed a strong recovery through 2023, peaking at nearly 3 million units by year-end. However, 2024 has seen a significant downturn, with sales dropping sharply in the first half of the year. This decline may reflect broader economic challenges or supply chain issues impacting production and distribution. The recent uptick in the last quarter of 2024 suggests potential stabilization, but the overall trend indicates a need for strategic adjustments to regain momentum in the competitive automotive market.

Data provided by:

Main Street Data

Toyota Motor Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q4-2025)

% Change Since: -6.97%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook with strong achievements in electrified vehicle sales and value chain profits, but challenges remain in terms of declining operating income forecasts, U.S. tariffs, and regional production issues. While the company has made strides in several areas, the forecasted decline and external challenges weigh heavily on future prospects.

Q4-2025 Updates

Positive Updates

Strong Operating Income

Operating income for the fiscal year ended March 2025 was JPY4.8 trillion, supported by price revisions and expansion of value chain profits.

Electrified Vehicle Sales Increase

The proportion of electrified vehicles reached 46.2%, a significant increase from the previous fiscal year, with HEVs increasing by 850,000 units.

Dividend Increase

The full-year dividend for the fiscal year ended March 2025 increased by JPY15 to JPY90, with a forecast increase to JPY95 for fiscal year 2026.

Expansion of Value Chain Profits

Value chain profits, including parts and finance, have been steadily expanding at a pace of JPY150 billion annually, with a full-year forecast of over JPY2 trillion.

Recovery in Production Volume

Consolidated vehicle sales are expected to increase to 9.8 million units, a 104.7% increase over the previous fiscal year.

Negative Updates

Decrease in Operating Income Forecast

The operating income forecast for the fiscal year ending March 2026 is JPY3.8 trillion, down from JPY4.8 trillion in FY 2025.

Challenges from U.S. Tariffs

The impact of U.S. tariffs is estimated at JPY180 billion for April and May 2025, with ongoing uncertainty affecting future forecasts.

Production Challenges in North America

Operating income in North America decreased due to lower production volume caused by a 4-month shutdown of Toyota Motor manufacturing in Indiana.

Sales Expenses Increase in China

Operating income in China decreased mainly due to an increase in sales expenses.

Company Guidance

In the financial results meeting for the fiscal year ending March 2025, Toyota provided comprehensive guidance on their performance metrics and future projections. The company reported an operating income of JPY4.8 trillion, supported by price revisions and value chain profit expansion, despite supply constraints and production suspension in the U.S. Looking ahead, they forecast an operating income of JPY3.8 trillion for fiscal 2026, reflecting a focus on strengthening their management foundation and investing in future profit pillars. Vehicle sales projections include 9.8 million consolidated units, with Toyota and Lexus sales expected to reach 10.4 million units, driven by a recovery in production volume. Electrified vehicles are anticipated to comprise 49.8% of total sales. The full-year dividend for fiscal 2025 was JPY90, with an increase to JPY95 forecasted for fiscal 2026. Toyota's efforts to bolster their operational base, reduce costs, and adapt to changing market demands underscore their commitment to sustainable growth and transformation into a mobility company.

Toyota Motor Financial Statement Overview

Summary

Toyota Motor demonstrates strong financial health with consistent revenue growth and profitability. The income statement shows robust gross and net profit margins, while the balance sheet indicates a stable financial position with a manageable debt-to-equity ratio and solid equity base. However, negative free cash flow due to high capital expenditures is a concern, despite strong operational cash flows.

Income Statement

Very Positive

Toyota Motor exhibits strong financial performance with a solid Gross Profit Margin of 20.3% and a notable Net Profit Margin of 10.9% for the TTM period. Revenue growth is evident with a 13.7% increase compared to the previous annual period, showcasing resilience and growth potential in a competitive industry. EBIT and EBITDA margins are healthy, indicating efficient operations and profitability.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a Debt-to-Equity Ratio of 1.10, indicating a balanced approach to leveraging debt while maintaining shareholder equity. The Return on Equity (ROE) stands at 14.2%, reflecting efficient management of equity to generate profits. The Equity Ratio of 37.9% signifies a solid equity base supporting the company's asset structure.

Cash Flow

Positive

Operating Cash Flow is robust, yet Free Cash Flow is negative, indicating high capital expenditures which may impact liquidity. The Operating Cash Flow to Net Income Ratio of 0.83 suggests effective conversion of profits into cash. However, the Free Cash Flow to Net Income Ratio is negative, pointing to challenges in generating free cash flow amidst significant investments.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	46.75T	45.10T	37.15T	31.38T	27.21T	29.93T
Gross Profit	9.50T	9.37T	6.31T	5.97T	4.83T	5.41T
EBITDA	8.62T	8.39T	5.19T	4.82T	4.61T	4.13T
Net Income	5.10T	4.94T	2.45T	2.85T	2.25T	2.04T
Balance Sheet
Total Assets	94.67T	90.11T	74.30T	67.69T	62.27T	52.68T
Cash, Cash Equivalents and Short-Term Investments	13.88T	14.11T	9.23T	8.62T	9.32T	5.70T
Total Debt	39.58T	36.56T	29.38T	26.50T	25.66T	20.55T
Total Liabilities	57.82T	54.87T	45.04T	40.53T	37.98T	31.94T
Stockholders Equity	35.91T	34.22T	28.34T	26.25T	23.40T	20.06T
Cash Flow
Free Cash Flow	-1.60T	-842.02B	-750.76B	-107.63B	-1.04T	-4.49B
Operating Cash Flow	4.24T	4.21T	2.96T	3.72T	2.73T	3.59T
Investing Cash Flow	-4.29T	-5.00T	-1.60T	-577.50B	-4.68T	-3.15T
Financing Cash Flow	391.01B	2.50T	-56.18B	-2.47T	2.74T	397.14B

Toyota Motor Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price175.74

Price Trends

50DMA

183.77

Negative

100DMA

182.77

Negative

200DMA

180.83

Negative

Market Momentum

MACD

-3.70

Positive

RSI

44.66

Neutral

STOCH

26.62

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TM, the sentiment is Neutral. The current price of 175.74 is below the 20-day moving average (MA) of 179.94, below the 50-day MA of 183.77, and below the 200-day MA of 180.83, indicating a bearish trend. The MACD of -3.70 indicates Positive momentum. The RSI at 44.66 is Neutral, neither overbought nor oversold. The STOCH value of 26.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TM.

Toyota Motor Risk Analysis

Toyota Motor disclosed 11 risk factors in its most recent earnings report. Toyota Motor reported the most risks in the "Ability to Sell" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

Regulatory, Legal, Political and Other Risks Q1, 2023

Toyota's operations are dependent on securing, retaining and developing talented, diverse employees. Q1, 2023

Financial Market and Economic Risks Q1, 2023

Toyota Motor Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
F	77 Outperform	$41.68B	8.40	11.47%	5.64%	3.03%	28.54%
LI	75 Outperform	$28.24B	26.02	12.22%	―	10.28%	-29.75%
TSLA	74 Outperform	$1.05T	179.16	9.16%	―	1.03%	-53.71%
GM	73 Outperform	$46.27B	6.93	8.88%	1.22%	7.76%	-14.17%
HMC	71 Outperform	$46.54B	8.12	6.54%	3.82%	0.83%	-26.70%
TM	70 Outperform	$227.95B	7.45	13.36%	3.61%	1.06%	-7.05%
Sector *	61 Neutral	AU$2.78B	25.79	5.01%	5.37%	2.63%	-29.95%

* Consumer Cyclical Sector Average

Performance Comparison

Toyota Motor

175.74

-27.97

-13.73%

Ford Motor

10.80

-1.03

-8.71%

General Motors

49.68

3.49

7.56%

HMC

Honda Motor Company

29.70

-1.88

-5.95%

TSLA

Tesla

323.63

113.77

54.21%

Li Auto

27.47

8.39

43.97%

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 25, 2025