Toyota Motors stockThe stock (NYSE:TM) has increased 56% and 14.6% respectively since March 2019, which brought it to $63 at the moment. Since the FY 2021 results in March 2021, the stock has been rising steadily. The company saw an 11% revenue decline y-o-y, to Y=272 trillion ($256.5 million), while earnings increased primarily because of higher dividend and interest income to Y=802.23 (7.56) per share. As the stock continues to recover, it has seen growth. In Q4 FY 2021, revenue rose 8.3% y/o to Y=768.9 Trillion ($71 billion). The sales volume also increased by 5% year-over-year in Q4 FY 2021.
We anticipate that the momentum will continue in FY 2022 (FY expires in March 2022).Toyota Motors’ RevenuesTo rise 7.1% to Y=29.1 Trillion ($269.9 Billion). Its net income will likely rise to Y=2.9 Trillion ($27 Billion), which will increase the EPS figure by Y=1043.37 in FY 2022. This, combined with the 18.8x P/E multiplier and a yen-dollar exchange rate of $0.00926, will result in Toyota Motors valuation upside is more than 10%, with a price of $190
More than 28% have been gained since the lows of March 23, 2003. Toyota Motors stock only 5% of upside is left for (NYSE: TM). TM’s stock rose from $111 to $142 at the bottom, compared to the S&P 500, which moved 60%. Over the past years, revenue has increased steadily and the company’s P/E multiple has increased. After the recent rally, we believe that the stock is near its near-term potential.
Toyota Motors, the largest auto company in the world, saw its revenues drop by 26% over the first six months of this year due to the Covid-19 crisis. This is a significant change from the same period last year. Toyota’s Q2 2021 ended Sept 2020 saw earnings of Y=225.21, while total revenues fell 11% yo-y. In the first six months, cash flows from operations amounted to Y=1290billion.
For FY 2021 (FY ending in March), we expect Toyota Motors’ revenues will remain flat at Y=29.930 billion. Its net income will likely fall by 5% year-over-year, decreasing the EPS to Y=723.27 in FY 2021. After the pandemic, revenue is expected to reach Y=30.542 billion in 2021. This is mainly due to recovery across segments. Moreover, the EPS number is expected to rise to Y=743.24, which combined with a P/E multiple of 21.8x and a yen-dollar exchange rate of $0.01 will result in Toyota Motors valuation of around $150.
[Updated 06/26/2020] It looks like Toyota stock has reached the end of the road after its recent rally
Toyota Motors’ stock has rebounded more than 15% from its March 23 low of $111 to reach its current level at $126. This compares to the 36% increase in the S&P 500 during the same time period. Toyota has very limited upside potential, according to us. The key to this is that the stock price is now 12% higher than at the end of FY 2019, which ended in March.
The roughly 5% increase in Toyota Motors’ revenue from FY 2018 to FY2020 is a factor. However, this growth was offset by the net income margin which dropped from 8.5% in 2018 and to 6.9% in 2020. Earnings growth per share was lower at -9.8%. This was slightly offset by share buybacks. The company has spent approximately $12 billion on repurchases between 2018 and 2020, which resulted in approximately 5% fewer shares outstanding. Although Toyota Motors had approximately $39 billion of cash at the time of our last report, it will be difficult for them to maintain this level of buybacks until the coronavirus pandemic is over.
Toyota’s P/E ratio increased from 8x in FY 2018, to 9x in FY 2020, and has remained at this level for the past few months. The current situation is not favorable for Toyota’s multiple compared to the levels of recent years.
The global spread of coronavirus led to lockdowns in many cities around the world, which has had an adverse impact on industrial and economic activity. This will likely adversely impact consumption and consumer spending. The US is the worst affected region for Toyota’s revenue. More than 35% of Toyota’s total revenue comes out of the US. A lower consumer spending and consumption will lead to lower demand for automobiles. These factors will hurt Toyota’s revenue. We expect that Toyota’s Q1 2021 results confirm this trend. Europe and the Americas will see negative growth. It will likely be accompanied by clearer FY’21 and Q2 guidance.
The extent of the coronavirus spread and the timing of recovery is crucial. Our dashboardTrends in U.S. Covid-19 cases this article provides an overview of the spread of the pandemic in the United States and compares it with trends in Brazil or Russia. Investors will be focusing on the 2021 results and valuations are crucial in finding value.
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Although Toyota stock has moved, it’s helpful to compare its peers. Ford Stock Comparison with PeersThis summarizes Ford’s performance against its peers in metrics that matter. More such comparisons can be found on comparisons of Peers.