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TM changes

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View the full Oct 31, 2026 version
Price
$194.61 → $195.71(+0.6%)
Next earnings
Nov 4, 2026 → Nov 5, 2026
Next earnings is estimate
Yes → No
Thesis
The market prices Toyota for falling profit, for US tariffs and for the costs of the move to new technologies. Toyota expects operating income of ¥3.4 trillion in the fiscal year to March 2027, down from ¥3.77 trillion, because of tariffs, higher material costs, the situation in the Middle East and higher spending. Its profit also depends on the exchange rate of the yen: the new forecast assumes ¥160 per US dollar. Investors also worry that battery electric and software vehicles from Chinese makers can take share from it over time. Results are better than feared: in Q1 fiscal 2027, operating income was ¥1.06 trillion, close to a year earlier, and Toyota raised its full-year operating income forecast by ¥400 billion. It also started a buyback of up to ¥1 trillion. For the gap to close, three things must be true. Toyota must reach its raised forecast while hybrid sales keep growing. Cost reduction and price must offset tariffs and material costs. Toyota must keep improving its capital efficiency with buybacks and the sale of cross-shareholdings. The Q2 fiscal 2027 report, removed: estimated for about added: on November removed: 4, added: 5, 2026, is the next test. The full-year results and the fiscal 2028 forecast in May 2027 are the main test. If these checks pass, the gap can close over the next three to six quarters. The main reason it may not close is a stronger yen, which would lower its profit from exports.
Checkpoints
Nov removed: 4, 2026 (estimate): added: 5, 2026: Q2 fiscal 2027 earnings: tariffs and the forecast. Pending. Watch: Results on track for the ¥3.4 trillion operating income forecast, or a higher forecast, pass; a cut to the forecast fails. May 2027 (estimate): Fiscal 2027 results and the fiscal 2028 forecast. Pending. Watch: A fiscal 2028 forecast with higher operating income and continued buybacks passes; another year of lower profit fails.