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Toyota Motor Corp 7203 Stock Quote

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Morningstar‘s Stock Analysis 7203

Currency in JPY
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Is it the right time to buy or sell?

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Foreign Exchange the Only Bright Spot in Toyota's Fiscal 2023 First Quarter

Analyst Note

| David Whiston, CFA, CPA, CFE |

Toyota’s fiscal 2023 first quarter suffered from supply chain shortages and inflated materials costs, but we see no reason to change our fair value estimate. Operating income fell 42% year over year and operating margin declined 580 basis points to 6.8% despite a JPY 195 billion foreign-exchange tailwind that was mostly from the yen weakening by 18.2% versus the dollar. A JPY 245 billion headwind from volume and mix plus JPY 315 billion from what Toyota called “soaring materials prices” were the main negative profit variances. Management also increased its full-year expected headwind from materials prices to JPY 1.7 trillion from JPY 1.45 trillion and remains committed to absorbing all of its Tier 1 suppliers’ cost pressures in this area. We’ve heard some skepticism from our supplier coverage on this promise, but we like that Toyota is offering to help and says it is giving suppliers a rolling three-month production schedule plan every month. We think this visibility is hard for even Toyota to predict, but suppliers are struggling with constant last-minute production stoppages, so any clarity helps the supply chain optimize its capacity to help Toyota maximize output.

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Key Statistics 7203

Company Profile 7203

Business Description

Founded in 1937, Toyota is one of the world's largest automakers with 10.38 million units sold at retail in fiscal 2022 across its light vehicle brands. Brands include Toyota, Lexus, Daihatsu, and truck maker Hino; market share in Japan is about 51%, while U.S. share is over 15%. The firm also owns large stake in Denso, a parts supplier, about 20% of Subaru, and holds investments in many other firms, including shares of Uber Technologies, Joby Aviation, DiDi Global, Aurora Innovation, and about 5% in each of Mazda and Suzuki. Fiscal 2022 sales excluding financial services were JPY 29.1 trillion. Toyota also has a financing arm and manufactures homes and boats.

1 Toyota-cho, Aichi Prefecture
Toyota, 471-8571, Japan
T +81 565282121
Industry Auto Manufacturers
Most Recent Earnings Jun 30, 2022
Fiscal Year End Mar 31, 2023
Stock Type
Employees 376,971