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      Toyota is at a crucial moment to avoid being in the losing group! The focus is on regaining sales power in the USA and China, with the spotlight on earning power. 【Earnings Preview】

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      moomooニュース日本株 wrote a column · Jan 31 07:08
      $Toyota Motor (7203.JP)$Toyota Motor is scheduled to announce its third quarter (October-December) earnings for the fiscal year ending in March 2025 on February 5.
      The July-September quarter saw a significant decline in profits, reversing the positive trend from the April-June period. Struggles in the two major markets of USA and China became evident. Particularly, the poor performance in the USA market stood out, with a decrease in passengers carried compared to the same period last year, and the operating margin of the North American business dropped to 0.6%.
      October-DecemberToyota's global passengers carried volume decreased by 1.6% compared to the same period last year, showing an improvement from the 3.6% decline in July-September.and the decrease wasimproved from the 3.6% decline in July-September.The decline in the USA also improved, andturned positive in China compared to the same period last year.
      ●According to Analyst Consensus,Operating margin for October-December is expected to increase from 10.1% in July-September to 11.6% in a V-shaped recovery.is in effect.
      ●In the assessment by 20 Analysts, 35.0% are bullish, 30.0% are slightly bullish, 35.0% are neutral, with a mutual evaluation of "slightly bullish". The average target price is 3,214.21 yen, offering an 8.1% upside from the January 31st closing price.
      Toyota is at a crucial moment to avoid being in the losing group! The focus is on regaining sales power in the USA and China, with the spotlight on earning powe...
      SobDuring the subdued July-September period,"Sales Power"and"Earning power"Both experienced a sharp decline together.
      Toyota's performance up to the first quarter (April-June) of fiscal year 23 and 24 was on a fast track. Fueled by the historic weakening of the yen and global reassessment of hybrid cars, in FY23, it surpassed 5 trillion yen in operating profit, a first for a Japanese company. In the 1st quarter of FY24, it recorded an operating profit of over 1.3 trillion yen, the highest ever for the period.
      However, the unease hidden behind Toyota's strong performance came to the forefront in the second quarter (July-September). A major factor was the tough conditions in the two largest markets, China and the USA. In China, facing strong competition from local EVs, it experienced consecutive decreases in passenger vehicles carried and a notable decline in market presence. On the other hand,In North America, the operating margin dropped to 2.0% in the April-June quarter and further to 0.6% in the July-September quarter.In the USA, impacted by recalls of multiple vehicle models and production stoppages, passenger vehicle carried dipped below the previous year's sales in June for the first time in 3 years and 1 month. In September, it experienced a 20.3% decrease, signaling a significant slowdown.
      In addition to the downturn in the two major markets and the certification fraud issue, Toyota's operating margin for the July-September period decreased from 11.1% in the April-June period to 10.1%. The recovered US market (10.8%) was once again overtaken. $Tesla (TSLA.US)$Due to the rise of Chinese competitors intensifying competition and making winners and losers more evident, even Toyota, if the 'sales power' and 'earning power' continue to weaken, could transition from being a 'winner' to a 'loser'.
      In a situation where the competition is intensifying due to the emergence of Chinese competitors and the winners and losers are becoming more apparent, even Toyota,If we continue to decline like this, 'Sales Strength 'and 'Earning Power ' we may go from being a 'winner' to a 'loser'.is in progress.Whether the operating margin in October-December further declined or began to recover will determine the future of Toyota.It will be a key point mentioned above. The third-quarter earnings will be a crucial moment for Toyota.
      HappyCompared to the previous year, improvements in passengers carried in the USA and China have turned into an increase in China.
      "Earning Power"The operating margin indicating the ability to earn will be revealed in the earnings report."Sales Power"The passengers carried representing the sales power have already been disclosed. Toyota's global passengers carried in Toyota's stand-alone basis from October to December, as announced, decreased by 1.6% year-on-year to 2.922 million units. Compared to the 7-9 months decline of 3.6% year-on-year, it has shown improvement.
      In the USA, following a year-on-year decline from July to September, which fell significantly by 8.0% compared to the previous quarter that had already dropped.Improvement continued with a decrease of 2.7% from October to December.On the other hand, in China, a turnaround from a 17.8% decline in April to June and a 9.7% decline in July to September resulted in a 2.4% increase from October to December.At least in terms of 'sales force,' it seems to have recovered from the worst period in July to September.At least'Sales Force'seems to have recovered from the worst period of July to September, and rebounded.it can be said.
      Regional sales volume of Toyota unit by quarter for the fiscal year 2024 compared to the same period last year.
      Regional sales volume of Toyota unit by quarter for the fiscal year 2024 compared to the same period last year.
      Moreover, the global sales volume of the Toyota Group in 2024 is 10.82 million units, becoming the world's top seller for the 5th consecutive year. However, there is a 3.7% decrease compared to the previous year.Becoming the world's top seller for the 5th consecutive year.However, there is a 3.7% decrease compared to the previous year.
      Trends in the global sales volume of major automobile groups over the past 6 years (Source: respective company HP).
      Trends in the global sales volume of major automobile groups over the past 6 years (Source: respective company HP).
      GrinAnalysts expect a V-shaped recovery in the operating margin.
      The third quarter is"Sales Strength"Although it has recovered, the issue issales powerTo what extent for the reinforcement measures of sales promotion,earning powerhas been sacrificed. In other words,the focus is on how the operating margin has changed
      According to Bloomberg, the analyst consensus for the third quarter (October-December) forecasts revenue to increase by 3.6% year-on-year to 35 trillion 246.1 billion yen, operating profit to decrease by 9.3% to 3 trillion 847 billion yen, and net profit to decrease by 21.6% to 3 trillion 96.5 billion yen.The operating margin from October to December is expected to be 11.6%, a significant improvement from 10.1% in July-September, and also exceeds 11.1% in April-June.If analysts' estimates are correct, Toyota will have shown a strong recovery in the third quarter.earning capacityAlso V-shaped recoverywill have done.
      SweatWill countermeasures emerge against the Honda-Nissan integration?
      The big news in the current automotive industry is undoubtedly $Honda Motor (7267.JP)$and $Nissan Motor (7201.JP)$Negotiations are underway for a management integration.
      Among domestic manufacturers, the rapid approach of the second and third largest in the country $Suzuki Motor (7269.JP)$ $Subaru (7270.JP)$ $Mazda Motor (7261.JP)$By companies without a cooperative relationship with Toyota"Non-Toyota Alliance"also can be viewed as a "Non-Toyota Alliance".
      On the contrary, outside of subsidiaries like Daihatsu, the Toyota Alliance remains in a loose cooperative relationship. Following the integration of Honda and Nissan and the downturn of European players,There is a possibility of accelerated industry consolidation.In addition, the movement of Toyota, the world's leading company in the industry, is attracting attention. It will be necessary to pay attention to whether any suggestions or comments will come out at the timing of the earnings announcement.
      FlushedReturn potential of 24% to the highest point in March of last year.
      The current stock price of Toyota is about 24% lower compared to the all-time high of 3,891 yen in March 24.PB (Price-to-Book Ratio) is around 1.1 times, and the latest PE (Price-to-Earnings Ratio) is around 9.4 times, indicating a relatively cheap situation.If there is a reversal of the operating profit margin from October to December and new developments towards industry consolidation, it could be a potential trigger for a stock price increase.
      ▲ Recent major ratings of Toyota Motor by securities firms.
      ▲ Recent major ratings of Toyota Motor by securities firms.
      moomoo News Mark
      Source: Toyota HP, Bloomberg, MOOMOO
      Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more
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      moomooニュース日本株
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