Toyota Boshoku (3116): Production cuts and inflation weighing down near-term earnings recovery; need to scrutinize effects of growth investment

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Toyota Boshoku (3116): Production cuts and inflation weighing down near-term earnings recovery; need to scrutinize effects of growth investment

J P M O R G A N Asia Pacific Equity Research

16 June 2026

Toyota Boshoku (3116)

Production cuts and inflation weighing down near- Neutral

term earnings recovery; need to scrutinize effects 3116.T, 3116 JP

of growth investment Price (15 Jun 26):¥2,242

▼Price Target (Dec-26):¥2,200

Prior (Dec-26):¥2,400

We lower our December 2026 price target from ¥2,400 to ¥2,200 and maintain our

Neutral rating. We expect earnings to remain low in 1H FY2026, as we expect an Japan Equity Research

impact from production cuts at customers and a delay in passing through the impact Autos & Auto Parts

of inflation. While we think production of vehicles destined for the Middle East and AC Wencong Zhang

the new RAV4 in the Americas is likely to pick up in 2H, a sharp structural decline in (81-3) 6736-8627

volumes in the China business could depress earnings over the medium term. wencong.zhang@jpmorgan.com

Increases in R&D and capex spending for new products and in strategic regions from Akira Kishimoto

this fiscal year demonstrate management's commitment to long-term growth, but it (81-3) 6736-8646

could take time to judge the impact of investment amid the rapidly changing akira.x.kishimoto@jpmorgan.com

competitive environment. JPMorgan Securities Japan Co., Ltd.

• Slow start in April-June: In addition to reduced production of vehicles

destined for the Middle East and a delay in the new RAV4’s ramp-up in the Key Changes (FYE Mar)

Americas, we expect a sharp decline in auto production volume in China to lead Prev Cur Δ

Adj. EBIT - 27E (¥ bn) 81 66 -18.7%

to a deterioration in Toyota Boshoku’s profitability. In terms of costs, we Adj.