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Toyota Motor
(7203)
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Rating:64Neutral
Price Target:
¥3,123.00
▲(7.80% Upside)
Action:Downgraded
Date:08/05/26
The score is primarily driven by solid but moderating financial performance, with cash-flow volatility (negative TTM free cash flow) and meaningful leverage offsetting profitability. Valuation is a clear positive (low P/E and ~3.1% yield), while technicals are neutral and do not indicate strong momentum.
Positive Factors
Global scale and balance-sheet resilience
Toyota’s exceptional asset base, global distribution and substantial equity provide resilience across vehicle cycles. This scale supports manufacturing efficiency, supplier access and ongoing investment in technology, production capacity and mobility services.
Negative Factors
Meaningful balance-sheet leverage
Toyota’s substantial debt load is a structural constraint for a capital-intensive automaker. Leverage can reduce flexibility during weaker vehicle cycles and increase sensitivity to funding costs, credit conditions and the cash demands of electrification investment.
Read all positive and negative factors
Positive Factors
Negative Factors
Global scale and balance-sheet resilience
Toyota’s exceptional asset base, global distribution and substantial equity provide resilience across vehicle cycles. This scale supports manufacturing efficiency, supplier access and ongoing investment in technology, production capacity and mobility services.
Read all positive factors
Toyota Motor (7203) vs. iShares MSCI Japan ETF (EWJ)
Market Cap
¥36.50T
Dividend Yield3.09%
Average Volume (3M)21.69M
Price to Earnings (P/E)8.8
Beta (1Y)1.22
Revenue Growth7.23%
EPS Growth7.76%
CountryJP
Employees367,990
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Manufacturers
Share Statistics
EPS (TTM)351.38
Shares Outstanding14,594,987,000
10 Day Avg. Volume23,861,439
30 Day Avg. Volume21,690,069
Financial Highlights & Ratios
PEG Ratio-0.60
Price to Book (P/B)1.03
Price to Sales (P/S)0.81
P/FCF Ratio73.81
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
¥3,933.33Price Target Upside35.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)310.77
Revenue Forecast (FY)¥53.63T
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 in Japan, North America, Europe, Asia, Central and South America, Oceania, Africa, the Mid...
How the Company Makes Money
Toyota primarily makes money through (1) automotive sales and (2) financial services, with additional contributions from parts/accessories and other mobility-related activities.
1) Automotive (vehicle and parts sales): The largest revenue stream ...
Toyota Motor Earnings Call Summary
Earnings Call Date:May 08, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: strong revenue and unit-sales achievements (including record revenues and electrified vehicle milestones), continued shareholder returns, and clear strategic initiatives to improve margins and diversify revenue. However, significant near-term headwinds — notably U.S. tariffs (JPY 1.38 trillion), Middle East-related cost and volume impacts (approx. JPY 670 billion assumed), a large year-on-year operating income decline (over JPY 1 trillion), and ongoing regional and supply-chain profitability pressures — temper optimism. Management emphasized mid- to long-term transformation (value chain expansion, robotics, AREA35) and maintained investment posture (record R&D), but acknowledged slower progress on structural reforms and persistent execution risks. Overall the call conveyed cautious confidence but highlighted material challenges that keep the outlook mixed.Positive Updates
Strong Global Vehicle Sales Growth
Consolidated vehicle sales reached 9,595,000 units, up 2.5% year-on-year (102.5% YoY). Toyota and Lexus combined vehicle sales totaled 10,477,000 units, up 2.0% YoY (102.0% YoY). Forecast for FY2027 consolidated vehicle sales set at 9.6 million units (100.1% of prior year) and Toyota/Lexus at 10.5 million units (100.2%).
Negative Updates
Significant Operating Income Decline
Consolidated operating income declined by JPY 1,029.3 billion year-on-year. Management forecasts operating income for FY2027 of JPY 3.0 trillion, representing a year-on-year decrease of approximately JPY 766–800 billion and marking the third consecutive year of operating income decline.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Global Vehicle Sales Growth
Consolidated vehicle sales reached 9,595,000 units, up 2.5% year-on-year (102.5% YoY). Toyota and Lexus combined vehicle sales totaled 10,477,000 units, up 2.0% YoY (102.0% YoY). Forecast for FY2027 consolidated vehicle sales set at 9.6 million units (100.1% of prior year) and Toyota/Lexus at 10.5 million units (100.2%).
Read all positive updates
Company Guidance
The call laid out full‑year FY2026 results and FY2027 guidance: for the year ended March 2026 Toyota reported consolidated vehicle sales of 9,595,000 units (102.5% YoY), Toyota/Lexus sales of 10,477,000 units (102.0%), electrified vehicle sales exceeding 5 million units, revenue of JPY 50,684.9 billion, operating income JPY 3,766.2 billion, income before income taxes JPY 5,152.9 billion and net income JPY 3,848 billion, while U.S. tariffs reduced operating income by JPY 1.38 trillion and drove a JPY 1,029.3 billion YoY drop; for FY2027 management guided to consolidated sales of JPY 51 trillion, operating income JPY 3 trillion (a decline of roughly JPY 766–800 billion YoY), income before taxes JPY 4,230 billion and net income JPY 3 trillion, with vehicle sales expected at 9.6 million units (Toyota/Lexus 10.5 million), electrified vehicles ≈6 million (HEVs >5 million, BEVs ~600,000 noted), FX assumptions of JPY 150/USD and JPY 180/EUR, R&D of about JPY 1.6 trillion, value‑chain revenue growing ~JPY 150 billion/year, a dividend raised to JPY 95/share for FY26 and guided to JPY 100/share for FY27, flexible share repurchases (no year‑end limit) and a mid/long‑term target to restore earnings power and reach an ROE of 20%.Toyota Motor Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
66
Positive
Cash Flow
46
Neutral
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 51.96T | 50.68T | 48.04T | 45.10T | 37.15T | 31.38T |
| Gross Profit | 8.71T | 8.46T | 9.58T | 9.37T | 6.31T | 5.97T |
| EBITDA | 7.36T | 7.63T | 8.27T | 8.39T | 5.19T | 5.30T |
| Net Income | 4.48T | 3.85T | 4.77T | 4.94T | 2.45T | 2.85T |
Balance Sheet | ||||||
| Total Assets | 10.00T> | 10.00T> | 93.60T | 90.11T | 74.30T | 67.69T |
| Cash, Cash Equivalents and Short-Term Investments | 10.34T | 12.66T | 15.92T | 14.11T | 9.23T | 8.62T |
| Total Debt | 43.95T | 43.21T | 38.79T | 36.56T | 29.38T | 26.50T |
| Total Liabilities | 64.41T | 64.50T | 56.72T | 54.87T | 45.04T | 40.53T |
| Stockholders Equity | 37.31T | 39.92T | 35.92T | 34.22T | 28.34T | 26.25T |
Cash Flow | ||||||
| Free Cash Flow | -842.31B | 558.38B | -1.21T | -842.02B | -750.76B | -107.63B |
| Operating Cash Flow | 4.13T | 5.47T | 3.70T | 4.21T | 2.96T | 3.72T |
| Investing Cash Flow | 1.71T | -1.52T | -4.19T | -5.00T | -1.60T | -577.50B |
| Financing Cash Flow | -4.07T | -536.66B | 197.24B | 2.50T | -56.18B | -2.47T |
Toyota Motor Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | ¥4.15T | 7.96 | 13.72% | 2.24% | 14.50% | 28.97% | |
64 Neutral | ¥36.50T | 8.77 | 10.10% | 3.28% | 7.23% | 7.76% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
59 Neutral | ¥1.87T | 21.92 | 3.31% | 4.52% | 0.29% | -71.88% | |
59 Neutral | ¥6.60T | -43.15 | -3.53% | 4.42% | 4.13% | -130.84% | |
56 Neutral | ¥757.73B | 7.18 | 1.95% | 4.72% | 3.89% | 381.66% | |
46 Neutral | ¥1.13T | -2.69 | -11.10% | ― | -0.62% | 49.29% |
* Consumer Cyclical Sector Average
JP:7203
Toyota Motor
3,070.00
237.41
8.38%
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Toyota Motor Corporate Events
Toyota Sets Market-Based Price for Employee Share Compensation Stock Disposal
Aug 7, 2026
Toyota Motor Corporation has set the disposal price for treasury shares to be used in its employee share-based compensation plan at ¥2,983.5 per share, giving the transaction a total value of about ¥3.44 billion. The move fits into Toyot...
Toyota Corrects Q1 Figures as Profit Jumps but FY2027 Margin Pressures Loom
Aug 7, 2026
Toyota reported FY2027 first-quarter consolidated sales revenues of ¥13.53 trillion, up 10.4% year-on-year, with net income attributable to the company surging 75.6% to ¥1.48 trillion despite an 8.8% drop in operating income. The automak...
Toyota Holds Q1 Line as Tariffs, Materials and Middle East Risks Bite
Aug 4, 2026
Toyota reported first-quarter operating income close to last year’s level despite a volatile environment marked by Middle East disruptions, higher material costs and U.S. tariffs. The company mitigated a sharper expected export decline to th...
Toyota Uses Treasury Stock to Expand Share-Based Compensation Plans
Aug 4, 2026
Toyota Motor Corporation has approved the continuation of its share-based compensation plan for senior professionals and senior management and the introduction of a new plan targeting key talent across the organization. Both programs use an existi...
Toyota Expands Share-Based Compensation Plans to Support Mobility Shift
Aug 4, 2026
Toyota Motor Corporation is extending its existing share-based compensation program for senior professional and senior management employees and launching a new equity plan for key talent across the organization. Both plans use an ESOP trust struct...
Toyota warns of broad risk factors and reiterates insider trading rules
Aug 4, 2026
Toyota Motor Corporation issued a detailed cautionary statement outlining the risks and uncertainties that could cause its future results to differ from current expectations, covering factors such as economic conditions, shifts in market demand, c...
Toyota Launches ¥1 Trillion Share Buyback and Treasury Share Retirement
Aug 4, 2026
Toyota Motor Corporation’s board has approved a new share buyback program of up to 500 million common shares, representing 4.22% of its outstanding stock, with a maximum outlay of ¥1 trillion. The repurchases will be conducted through o...
Toyota Boosts Q1 Earnings and Ups Dividend Despite Lower Operating Margin
Aug 4, 2026
Toyota reported first-quarter FY2027 sales revenues of ¥13.53 trillion, up 10.4% year on year, while operating income fell 8.8%, but net income attributable to the company surged 75.6% and earnings per share nearly doubled, reflecting stronge...
Toyota Tweaks ESOP Terms for Senior Staff to Reflect Global Workforce
Jun 18, 2026
Toyota Motor Corporation has revised its employee share-based compensation plan for senior professional and senior management staff, which operates through an ESOP trust. The changes refine how and when shares or cash equivalents are delivered, al...
Toyota Reshapes Board and Executive Lineup After Shareholders’ Meeting
Jun 17, 2026
Toyota Motor Corporation has overhauled its top governance structure following its ordinary general shareholders’ meeting, confirming the composition of its board and audit bodies. Akio Toyoda continues as chairman and representative directo...
Toyota Motor Books Over ¥1.2 Trillion Gain on Sale of Toyota Industries Stake
Jun 15, 2026
Toyota Motor Corporation has completed the sale of all 74,100,604 shares it held in Toyota Industries Corporation, representing a 24.66% stake, as part of a broader capital restructuring agreed under a master transaction framework with Toyota Fudo...
Toyota Adjusts Capital Plan for OneStream Ahead of Logistics Business Split
May 28, 2026
Toyota Motor Corporation, a major Japanese automaker with extensive global operations and a strong presence in hybrid and mobility technologies, is also expanding into logistics optimization solutions to enhance efficiency across its value chain. ...
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.