A BRIEF ANALYSIS OF TOYOTA STOCK (TM)

Published: 24 May 2022 by Tela Equity Research analyst - telaadvisor

BUSINESS

Toyota Motor is a Japanese multinational automotive manufacturer that was founded in 1937. TOYOTA INDUSTRIES CORPORATION is primarily engaged in the, manufacture and sale of automobiles, industrial vehicles and textile machinery. The Company operates in three business segments.

The Automobile segment manufactures and sells automobiles,

• engines,
• compressors for automotive air-conditioners, and
• electronic equipment, among others.

The Industrial Vehicle segment provides

• forklift trucks,
• warehouse equipment,
• automatic warehouse,
• vehicles for high-place work,
• logistics solution and sales finance business.

​The Textile Machinery segment offers

• weaving machines and
• spinning machines, as well as yarn quality measurement equipment and cotton grading equipment.

TOYOTA'S KEY DATA

The following table provide a summaryof Toyota income statetement 

What do they offer ?

Sales per business

Toyota's historical stock price

Toyota's quarterly
historical stockprices

VALUATION

Profit margin:                 9.08 %
Operating margin:          9.55 %
ROA:                                 2.88 %
ROE:                                 11.18 %
​PE vs Market: Toyota is good value based on its PE Ratio (9.9x) compared to the JP market (12.2x).

SWOT

TOYOTA MAJOR STRENGTH
Toyota’s strengths are internal factors that help Toyota maintain its success in the auto industry. These are the reasons why Toyota is so successful today:

1. The Toyota Way: Toyota’s operations follow the principles of continuous improvement and respect for people. These principles boost productivity and foster innovation. They also inspired the concept of lean management. For many decades, these principles have formed the core strength of Toyota.
2. Fuel Cell Patents: Automobile companies are pursuing the vision of zero-emission vehicles through two main technologies – hydrogen fuel cells and electric vehicles. Toyota owns around 5,680 global patents related to hydrogen fuel cells. These patents put Toyota in a strong position in the zero-emission vehicles market
3. Solid-state battery park
4. Hybrids: Toyota develops competencies in clean energy vehicles, it’s consolidating its position in hybrid vehicles. Toyota makes some of the most reliable green cars in the market.

SOME OF TOYOTA'S WEAKNESSES 

As a tool, SWOT analysis looks at weaknesses as internal factors that prevent or slow down growth. Here are some of Toyota’s weaknesses:
1.      Recalls: Although Toyota sets the standards for quality control, its design and production aren’t flawless. For instance, early this year, Toyota recalled 700,000 vehicles because of a faulty fuel pump. Such situations devalue the people’s trust in the brand and can undo decades of goodwill.
2.      Rigid hierarchy
3.      Partial global presence
​

TOYOTA COMPETITORS

​Ford, Volkswagen, Hyundai, General Motors, and Nissan. Together these companies employ 1 million people worldwide, with Toyota employing only 359 thousand people and ranked 1st among Toyota’s Top 5 competitors. The global automotive industry is worth as much as US$4 trillion. With as much as an estimated 1.4 billion cars in use on the road around the world.

FINANCIAL HEALTH

TOYOTA'S MANAGEMENT

​Akio Toyoda(65Y)
12.9 years tenure
$3 449 943 salary
Mr. Akio Toyoda has been a Director of DENSO Corporation since June 2019. Mr. Toyoda has been the Chief Executive Officer of Toyota Motor Corporation (TMC) since June 23, 2009 and its President since 2009 and serves as its Chief Branding Officer. Mr. Toyoda had served as Chairman and Chief Executive Officer of Toyota Motor North America, Inc. He served as Chief Officer of the Electric Vehicle (EV) Business Planning Department at Toyota Motor Corporation since December 1, 2016 until July 28, 2017.
He serves as a Senior Adviser of Toyota Media Service Corporation. He has been the President of Hitachi Ltd and Honda Motor Co. since March 2009. He serves as an Auditor of Toyota Boshoku Corporation. He served as the Chief Executive Officer and President of Toyota South Africa Motors (Pty) Ltd until April 1, 2016.
He served as an Executive Vice President at Toyota Motor Corporation from January 21, 2005 to June 2009, Senior Managing Director from 2003 to 2005 and Chief of Asia & China Operations Officer since 2003 and also served as its Division General Manager of Taiwan & China Offices. He joined TMC in 1984 and was its Managing Director from 2002 to 2003. He served as Vice President of New United Motor Manufacturing Inc. He served as an Auditor of Shiroki Corporation. He served as a Corporate Auditor at JTEKT Corporation.

OWNERSHIP STRUCTURE-WHO OWN TOYOTA COMPANY ?

• Institutions: 43 %
• General Public: 44
• Individual Insiders: 0.2%

TOP SHAREHOLDERS ARE:

CONCLUSSION

1. Do you understand the product or service offered by the company?
2. Will society still be using this product in 15 years?
3. Does the company have a MOAT?