Toyota To Meet Consensus, Growth On Back Of Europe And Asia

Toyota Motors Corporation (NYSE: TM) the world’s largest automaker by sales, sells its cars mainly under three brands – Toyota, Lexus, and Scion. The company is to report its Quarter 3 (ended December 2018), Fiscal year 2019 financials on February 6, 2019. The company is expected to post revenue in the range of $69 billion (¥7.57 billion) and earnings of around $1.93 (¥211.77) for the Quarter.

We currently have a $147 price estimate for the company, which is above the current market price. View our interactive dashboard –Our Outlook For Toyota Motors In Fiscal Year 2019– and modify the key assumptions to arrive at a price estimate of your own.

In the previous quarter the company had recorded a very small increase in the number of vehicles sold as compared to Quarter 2 of the previous Fiscal year. This was attributed to the changing consumer preferences in the market. It has been shifting toward SUV and crossover variants and also as a result of a decline in its passenger car market, as Toyota is not a mass producer of passenger vehicles. We expect Quarter 3 to be similar

Even though the sales volume is down in the local market and North America the company is steadily experiencing better operating margins in those regions. This was specifically due to better pricing in the regions. In the second quarter Europe and Asia led the sales volume and operating margins which increased by 20 basis points and 24 basis points, respectively. We expect those two regions to continue the volume increase for the coming quarter.

Overall, sales volume and margins are expected to be negatively impacted by a strengthening yen as it would make Japanese products less competitive globally. The company expects its Fiscal Year 2019 operating margin to be 30 bps lower than Fiscal Year 2018, and net income lower by 200 bps due to currency headwinds.

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