Toyota Motor

Toyota Guides for a 22% Profit Drop--Tough to Buy This Dip For Now

Equity Bottom-Up
264 Views, 12 May 2022 03:26
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EXECUTIVE SUMMARY
  • Toyota is famous for conservative guidance, but today's FY3/23 estimates of a 22% decline in pretax profit raised some eyebrows. Raw materials & logistics are to blame. 
  • Adjusting for various conservative assumptions by Toyota for FY3/23, flat profits are possible, but margin deterioration appears unavoidable.  
  • On flat profits in FY3/23, the 12x PER & 5.5x EV/EBITDA are not particularly cheap. Toyota is in the "Guidance Dog House" until it can produce a significant beat. 

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