Kentaro Hosoda, an analyst from Bank of America Securities, maintained the Buy rating on Toyota Motor (TYT – Research Report). The associated price target remains the same with Yen3,300.00.
Kentaro Hosoda has given his Buy rating due to a combination of factors including Toyota’s strategic production plans and solid underlying earnings. Despite a slight underperformance in operating profit for the second quarter, attributed to one-off costs and greater-than-expected supplier support, the company is set to maintain a production rate aiming towards 10 million units annually. This shows resilience and a strong foothold in production capabilities.
Kentaro notes that Toyota’s operating profit guidance remains intact at ¥4.3 trillion, suggesting a high level of visibility on profit growth. Additionally, the company is actively responding to shifts in the US market, particularly by expanding its plug-in hybrid electric vehicle (PHEV) portfolio in response to changing demand dynamics. Such strategic moves, combined with low dealer inventories and sales incentives, bolster confidence in Toyota’s ability to sustain growth and profitability, justifying the Buy rating.
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Toyota Motor (TYT) Company Description:
Founded in 1937, Toyota is one of the world’s largest automakers with 10.5 million units sold in fiscal 2020. Its brands include Toyota, Lexus, Daihatsu, and Hino; market share in Japan is about 49%, while U.S. share is nearly 14%. The firm also owns 24.5% of Denso, a parts supplier, 20% of Subaru, and holds investments in many other firms, including about 10.3 million shares of Uber Technologies and about 5% in each of Mazda and Suzuki. Fiscal 2020 sales excluding financial services were JPY 27.8 trillion. Toyota also has a financing arm and manufactures homes and boats.
