TM changes
Pick any two versions below to diff them.
- Price
- $195.71 → $213.00(+8.8%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Next earnings
- Nov 5, 2026 → Feb 5, 2027
- Next earnings is estimate
- No → Yes
- Thesis
- The market prices Toyota for removed: falling profit, for US removed: tariffs added: tariffs, for higher material costs and for the costs of the move to new technologies. Toyota removed: expects operating income of ¥3.4 trillion added: still has tariff-driven losses in removed: the fiscal year to March 2027, down from ¥3.77 trillion, because of tariffs, higher material costs, the situation in the Middle East added: North America, and removed: higher spending. Its added: its profit removed: also depends on the exchange rate of the yen: removed: the new added: its 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 removed: Q1 added: the first half of fiscal 2027, operating income removed: was ¥1.06 trillion, close added: rose 9.2% to removed: a year earlier, added: ¥2.19 trillion, and added: in November 2026 Toyota raised its full-year operating income forecast removed: by ¥400 billion. added: for the second time, to ¥3.9 trillion, above the ¥3.77 trillion of fiscal 2026. It also removed: started a added: raised its buyback removed: of added: program to up to removed: ¥1 trillion. added: ¥1.3 trillion, which includes a tender offer for shares that insurance companies hold. 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 removed: Q2 added: Q3 fiscal 2027 report, removed: on November 5, 2026, added: expected in early February 2027, 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.
- Risks
- US tariffs on imported vehicles and parts raise Toyota's costs. Higher tariffs, or new trade rules in other markets, can lower its profit. A large part of Toyota's profit comes from exports. A stronger yen against the US dollar and the euro would lower its operating income. Chinese carmakers sell battery electric and software vehicles at low prices. They can take share from Toyota in China, Asia and other markets. Earthquakes, supply disruptions and conflicts, such as the situation in the Middle East, can stop production or shipments. The effect of the 2026 Kumamoto earthquake was not removed: yet in the removed: forecast. added: forecast of August 2026.
- Balance sheet
- At removed: June added: September 30, 2026, Toyota had total assets of removed: ¥102.64 added: ¥101.98 trillion, liabilities of removed: ¥64.41 added: ¥63.67 trillion and added: total shareholders' equity of removed: ¥38.23 trillion. added: ¥38.31 trillion, of which ¥37.45 trillion belonged to Toyota's shareholders. At March 31, 2026, total assets were ¥105.52 trillion and total equity was ¥41.02 trillion; the fall came mostly from the sale of its shares in Toyota Industries, the deconsolidation of Hino Motors and buybacks. Most of its debt belongs to its financial services business, which funds loans to car buyers and dealers. removed: Outside financial services, total liquid assets (cash, time deposits, bonds and monetary trust funds) were ¥14.73 trillion, down from ¥17.42 trillion at March 31, 2026. Cash and cash equivalents removed: fell by ¥2.32 added: were ¥9.48 trillion removed: to added: at September 30, 2026, down from ¥10.34 trillion removed: in the quarter. Equity fell 6.8% in the quarter, mostly because of the sale of its shares in Toyota Industries and the deconsolidation of Hino Motors. added: at June 30, 2026. Net cash from operating activities was removed: ¥536.5 billion added: ¥1.60 trillion in removed: Q1 added: the first half of fiscal removed: 2027. added: 2027, down from ¥2.94 trillion a year earlier. Toyota plans an annual dividend of ¥100 per removed: share and has a added: share. In November 2026, it raised its buyback program removed: of added: to up to removed: ¥1 added: ¥1.3 trillion to August removed: 2027. added: 2027, and it had used ¥330.0 billion of it by October 31, 2026. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Nov 5, 2026: Q2 fiscal 2027 earnings: tariffs and the forecast. removed: Pending. added: Passed. Watch: Results on track for the ¥3.4 trillion operating income forecast, or a higher forecast, pass; a cut to the forecast fails. added: Outcome: First-half operating income rose 9.2% to ¥2.19 trillion, and Toyota raised its full-year operating income forecast to ¥3.9 trillion from ¥3.4 trillion. Feb 5, 2027 (estimate): Q3 fiscal 2027 earnings: the raised forecast. Pending. Watch: Nine-month results on track for the ¥3.9 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.
- Recent events
- added: Nov 5, 2026: Toyota reported first-half fiscal 2027 results. Sales revenues rose 9.5% to ¥26.96 trillion, operating income rose 9.2% to ¥2.19 trillion and net income attributable to Toyota rose 26.1% to ¥2.24 trillion. Toyota raised its forecast for the year to March 2027 to operating income of ¥3.9 trillion from ¥3.4 trillion and net income of ¥3.57 trillion, with sales revenues of ¥53.5 trillion. It kept its planned annual dividend of ¥100 per share. Nov 5, 2026: The board raised the buyback program to up to 610 million shares, or up to ¥1.3 trillion, to August 4, 2027, and added a tender offer for its own shares at ¥2,725 per share. Insurance companies of the MS&AD, Tokio Marine and Sompo groups said that they will tender part of their Toyota shares. By October 31, 2026, Toyota had bought back 108.9 million shares for ¥330.0 billion under the program. Oct 5, 2026: Toyota said that it bought back 35.6 million of its shares for ¥108.5 billion in September 2026 under its ¥1 trillion buyback program. Aug 4, 2026: Toyota reported Q1 fiscal 2027 results. Sales revenues rose to ¥13.53 trillion and operating income was ¥1.06 trillion, down from ¥1.17 trillion. Net income rose to ¥1.48 trillion with large other income. Toyota raised its forecast for the year to March 2027 to sales revenues of ¥54.0 trillion, operating income of ¥3.4 trillion and net income of ¥3.25 trillion. It said that the effect of the 2026 Kumamoto earthquake was not yet in the forecast. Aug 4, 2026: The board approved a buyback of up to 500 million shares, or up to ¥1 trillion, from August 5, 2026 to August 4, 2027, and the cancellation of 200 million treasury shares. May 8, 2026: Toyota reported fiscal 2026 results. Sales revenues were ¥50.68 trillion, operating income was ¥3.77 trillion and net income was ¥3.85 trillion. Its first forecast for fiscal 2027 was operating income of ¥3.0 trillion.