Analyst Note| David Whiston, CFA, CPA, CFE |
Toyota reported what we see as solid second-quarter and first-half fiscal 2022 results despite the chip shortage. Due to an increase in full-year fiscal 2022 guidance and a forecast for a weaker yen against the dollar, we are raising our dollar and yen per share fair value estimates by about 3% and 5%, respectively, to $179 and JPY 2,000. We expect the shortage to improve for Toyota during the second half of fiscal 2022 but remain an issue for the auto industry into the firm’s fiscal 2023. Toyota will also be battling higher steel costs like its competitors.