Toyota, turning point towards stock price uptrend in interim results? Expecting profit increase due to weakened yen and strong sales of hybrid cars [Earnings Preview]

The yen's depreciation benefits and hybrid cars supported the highest first-quarter profit in history.
Despite a decrease in sales volume due to issues such as certification fraud, the first quarter achieved increased revenue and profit. In particular, operating profit increased by 16.7% year-on-year to 1 trillion 308.5 billion yen.Achieved the highest profit on record for the first quarter.I did.
What led the strong performance in the first quarter was the benefits of yen depreciation and hybrid cars.Indeed.
The increase in operating profit due to the yen depreciation amounted to 370 billion yen, equivalent to 28.3% of the total operating profit. The exchange rate for Toyota's first half of the 23 fiscal year was 137 yen, and the assumed rate for the 24 fiscal year is 1 dollar = 145 yen. The average exchange rate for the first quarter was 156 yen, resulting in a benefit of about 19 yen compared to the same period last year and about 11 yen compared to the assumed rate.
Hybrid cars have contributed to improving profit margins as they are on par with gasoline cars in terms of profitability, while allowing for higher pricing. In the first quarter, while the sales volume of all car models decreased by 4.2% compared to the same period last year, hybrid cars increased by 22.5%.Among the sales vehicles, the proportion of hybrid cars increased by 7.8 percentage points from the same period last year, reaching 39.3%. It rose to 57.1% domestically.

The benefits of a weak yen until the middle of the year are approximately 430 billion yen?
On the other hand,In the second quarter, there was a sharp turn towards a stronger yen from mid-July, but overall it remained at a level similar to Toyota's assumed rate or a weaker yen.I did.
The background to the yen's appreciation includes former President Trump's criticism of a weaker yen, the Ministry of Finance's intervention in yen buying totaling 5.5 trillion yen, unexpected additional rate hikes by the Bank of Japan at the end of July, and the Federal Reserve Board's significant 0.5% rate cut starting in mid-September. The reversal of yen carry trades by hedge funds led to moments where the exchange rate briefly fell below 140 yen in mid-September.
The average exchange rate was around 149 yen to the dollar in the 3 months from July to September, and around 152 yen to the dollar in the 6 months from April to September. Toyota's estimated exchange rate for the fiscal year 2024 remains at 145 yen, while the exchange rate for the first half of fiscal year 2023 (April to September) was 141 yen. Based on the increase of 370 billion yen compared to the same period of the previous year in the first quarter,An additional effect of operating profit of approximately 430 billion yen in the previous period, and approximately 60 billion yen in the July-September period alone.has been.

Hybrid car sales continue to be strong.
For the entire Toyota Group.Global sales volume from April to September decreased by 4.0% year-on-year to 5.37 million3314 units. Volkswagen Group stayed at 4.42 million units, maintaining its position as the world's number one. Despite the impact of production cuts due to certification irregularities and recalls, the growth of hybrid cars supported sales, similar to the first quarter.Global sales for Toyota alone decreased by 2.8%, reaching 5.02 million8830 units. For the 4-month period from June to September, it remained below the previous year's level.
continuously below the previous year for four consecutive months from June to September.IsDomestically, it decreased by 9.3%.to 0.71 million units, significantly below the same period last year. The impact of certification fraud issues has led to a year-on-year decline for the 9 months from January to September in the previous year.
Looking only at hybrid cars, global sales increased by 21.1% compared to the same period last year, reaching 2.03 million units.Especiallyoverseas saw a 28.9% increase compared to the same period last year, reaching 1.62 million units..The ratio of hybrid cars to global sales has reached 40.4%, including all electric vehicles such as plug-in hybrid cars at 44.4%.In the fiscal year ending in December 2023, sales and profits reached an all-time high with a double-digit increase, driven by a strong performance in Asia including Japan.

Analysts are expecting profit to exceed company forecasts.
The analyst consensus for interim performance forecast by Bloomberg,Revenue increased by 6.1% year-on-year to 23 trillion 321.7 billion yen, operating profit decreased by 0.2% to 2 trillion 553.7 billion yen, and net profit decreased by 10.1% to 2 trillion 326.9 billion yen.The company'sIt is expected to reach 54% of revenue, around 60% of operating profit, and over 65% of net profit compared to the full-year outlook.reach.

Could this trigger a turnaround in stock price?
Toyota motorShare buyback totaling 884.5 billion yen from May to September, but the stock price has been on a declining trend since the beginning of this fiscal year.Looking at the chart, the moving averages show a downward trend; the 25-day moving average has been declining since late April, and the 75-day moving average since June. After August, the recent PER has been around 7 times, often falling below 1 times the PBR.

A symbolic event of negative sentiment from investors towards Toyota stock was the TOB for share buyback from July to August. In response to the intentions of policy shareholdings sales from six companies including Mitsui Sumitomo Insurance, Toyota announced a TOB for share buyback from the six companies on July 23.TOB aimed at buying back shares from the six companies, with a repurchase price set at 2781 yen, a 10% discount from the closing price of 3090 yen on July 22.However, following the "Reiwa Black Monday" on August 5, the stock price declined, and on the final application day of the TOB on August 26, it closed at 2597.5 yen, which was 7% below the TOB price.
As a result, the number of shares applied for the TOB exceeded the planned acquisition amount by more than 50 million shares. The planned shares will be acquired through pro-rata allocation.
By the way, as of November 1st, the closing price was 2615.5 yen, which did not reach the TOB price, and the PBR was 0.96 times, failing to reach 1 time. The recent PER is 7.1 times.Attention is drawn to whether Toyota's undervalued shares will reverse following the announcement of interim results.To be done.
Toyota, on the other hand, expanded the framework of its share buyback until the end of April 2025 from 1 trillion yen to 1.2 trillion yen to buy back a portion not acquired from six companies in May, which it purchased through off-hour trading (ToSTNeT-3) at the acquisition price of 2,617 yen, the closing price on September 24 when the buyback was announced.