JEDDAH: Toyota Motor Corporation is boosting its Japanese production by 30 percent in May in order to replenish inventories. Toyota shares closed yesterday at 2,900 yen.
Toyota now holds the crown as the world’s largest automaker and has a decent balance sheet that looks nothing like its dying US rivals. From a quick investor perspective, Toyota Motor has a P/E of 14.9 and forward P/E of 12.8, that sounds great but going on P/E these days isn’t what it used to be.
“We are facing a global recession and nobody is buying new cars. But if you are in the market for a new car, a vehicle made by Toyota is on most American’s shopping list,” said one economic analyst.
“Then there’s the point of view that the yen’s sudden drop over the last week or so is delivering a glimmer of hope to Japan’s big exporters, whose earnings have been battered by both plunging demand and the strong yen,” the WallStNation.com reported quoting the analyst.
The yen’s drop lifted the dollar to 97.87 yen last week in Tokyo — its highest since mid-November — jumping 9 percent from 90 yen two weeks ago. That’s great news for Toyota because a weaker yen inflates their foreign income when repatriated to Japan. The yen was trading at 98.16 to the dollar yesterday.
“One reason I’m considering picking up Toyota — the Prius and their lineup of hybrid cars, they are the best and only Honda comes close to what Toyota has to offer,” a customer said.
The market is flooded with gas/electric hybrid vehicles — the Ford Escape, Nissan Altima, Chevrolet Silverado — but the good old Toyota Prius still takes the top spot, according to the Consumer Reports Annual Auto Issue.
“So now will the analysts get onboard the Toyota Motor train?,” the analyst said. Fast Money’s Jeff Macke suggesting going long on Toyota recently, you can’t help but think this is going to help Toyota shareholders. Macke is one of the few traders on that show that is credible and entertaining when he speaks, and just like E.F. Hutton, people listen when he speaks, the analyst added.