Toyota Motor

Research evidence excerpt

Toyota Motor

Global Markets Research

29 June 2026Toyota Motor

7203.T 7203 JP ADR:TM US / EQUITY: JAPAN AUTOS & AUTO PARTS

We await specifics around plan to become a mobility company Rating

From Suspended Neutral

We assign a Neutral rating, think advantages in HVs and cautious Target price

guidance have already been priced in to a considerable extent From N/A JPY 2,950

We assign a Neutral rating, expect conditions for HVs to remain favorable but not to Closing price

the extent that they would exceed expectations 26 June 2026 JPY 2,768.0

We assign a Neutral rating to Toyota Motor and calculate our target price of ¥2,950 based

on the correlation between P/B and ROE. While conditions have remained advantageous Implied upside +6.6%

for the company's high-margin HVs, as evidenced by the rise in gasoline prices in the US,

we do not think they exceed equity market expectations to an extent that would warrant

revisiting valuations. The stock market had already priced in cautious full-year 27/3

operating profit guidance, and even if quarterly earnings compare well to guidance, this Relative performance chart

would be unlikely to be viewed as a positive surprise. Auto sector share prices have fallen

since the start of March due to deterioration in the situation in the Middle East, and the

company's share price has fallen further since it released 26/3 results. While investors

have been favoring AI/semiconductor stocks, we think they have been avoiding Toyota

Motor as a major stock in the auto sector because of the uncertain demand outlook and

concerns about earnings being squeezed by rising input costs. While this is likely part of

the reason for the share price decline, we think the main reason is that the company has