Toyota Motor Corporation (TM) shares fall as market gains: What you need to know

In the last trading session, Toyota Motor Corporation(TM) closed at $171.70, marking a -0.02% move from the previous day. That move lagged the S&P 500’s 1.17% daily gain. Meanwhile, the Dow Jones gained 0.8% and the tech-heavy Nasdaq gained 0.18%.

Today, shares of the company were down 7.93% over the past month. At the same time, the Auto-Tyres-Trucks sector lost 6.16%, while the S&P 500 gained 0.88%.

Toyota Motor Corporation will look to show strength ahead of its next earnings release. In this report, analysts expect Toyota Motor Corporation to post earnings of $2.86 per share. That would mark a year-over-year decline of 44.79%. Meanwhile, Zacks’ consensus estimate for revenue calls for net sales of $70.2 billion, down 3.26% from the year-ago period.

Looking to the full year, our Zacks consensus estimates suggest analysts are expecting earnings of $18.53 per share and revenue of $280.35 billion. These totals would mark changes of +23.62% and +8.99%, respectively, from last year.

It’s also important to note recent changes to analyst estimates for Toyota Motor Corporation. These recent revisions tend to reflect the evolving nature of short-term trading trends. Thus, positive revisions to estimates reflect analysts’ optimism about the company’s business and profitability.

Research indicates that these revisions to estimates are directly correlated to near-term stock price dynamics. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes into account these estimation changes and provides a clear and actionable scoring model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven track record of outperformance, with #1 stocks returning an average of +25% per year since 1988. In the past 30 days, our consensus EPS projection has increased by 1.74%. Toyota Motor Corporation currently holds a Zacks rank of #3 (Hold).

Regarding its valuation, Toyota Motor Corporation holds a Forward P/E ratio of 9.27. For comparison, its industry has an average Forward P/E of 8.88, meaning Toyota Motor Corporation is trading at a premium to the group.

Additionally, it is worth mentioning that TM has a PEG ratio of 0.42. The PEG ratio is similar to the widely used P/E ratio, but this measure also takes into account the company’s expected earnings growth rate. Automotive – Foreign equities hold an average PEG ratio of 0.47 based on yesterday’s closing prices.

The Automotive – Foreign Industry is part of the Auto-Tyres-Trucks sector. This industry currently has a Zacks Industry Rank of 149, which places it in the bottom 42% of all 250+ industries.

The Zacks Industry Ranking assesses the strength of our individual industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

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Luisa D. Fuller