Toyota Motor Corporation (TM) Hits Highest Level In 52 Weeks, Time To Cash In?
Hhave you paid attention to the actions of Toyota Motor (TM)? Shares were higher, as the stock rose 7.9% in the past month. The stock hit a new 52-week high of $ 186.86 in the previous session. Toyota Motor has gained 20.7% year-to-date compared to the -1.9% movement for the Zacks Auto-Pneus-Trucks segment and the 8.5% return for the Zacks Automotive – Foreign segment.
What drives outperformance?
The stock has an impressive track record of positive earnings surprises, as it hasn’t missed our consensus earnings estimate in any of the past four quarters. In its latest earnings report on August 4, 2021, Toyota Motor Corporation announced EPS of $ 5.87 versus a consensus estimate of $ 4.68.
For the current fiscal year, Toyota Motor Corporation is expected to post earnings of $ 19.73 per share on revenue of $ 294.87 billion. This represents a 31.62% change in EPS on a 14.64% change in revenues. For the next fiscal year, the company is expected to earn $ 21.05 per share on $ 309.8 billion in revenue. This represents a year-over-year change of 6.71% and 5.06%, respectively.
Toyota Motor Corporation may have hit a 52-week high right now, but what the future might hold for the action? A key aspect of this question is to look at the valuation metrics to determine whether the business should experience a setback from this level.
On this front, we can look at Zacks style scores, as they offer investors a variety of ways to browse stocks (beyond the Zacks rank of a stock). These styles are represented by ratings ranging from A to F in the Value, Growth, and Momentum categories, while there is also a combined VGM score. Investors should view style scores as a valuable tool that can help you choose the most appropriate Zacks Rank stocks based on their individual investing style.
Toyota Motor Corporation has a value score of A. Growth and stock momentum scores are B and F respectively, giving the company a VGM score of A.
In terms of the distribution of value, the stock is currently trading at 9.5 times the current year’s EPS estimates. On a sliding cash flow basis, the stock is currently trading at 7.1X versus an average of 6.8X for its peer group. Additionally, the stock has a PEG ratio of 0.42. This is not enough to put the company in the top echelon of all the stocks we cover from a value perspective.
We also need to look at the Zacks ranking for the stock, as it overrides any trend on the style score front. Fortunately, Toyota Motor Corporation currently has a Zacks rank of No.2 (buy) thanks to rising profit estimates.
Given that we recommend that investors select stocks with the Zacks rating of 1 (strong buy) or 2 (buy) and style scores of A or B, it looks like Toyota Motor Corporation is passing the test. So, it looks like Toyota Motor Corporation shares may have potential in the weeks and months to come.
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Each was selected by a Zacks expert as the # 1 favorite stock to earn + 100% or more in 2021. Previous recommendations climbed + 143.0%, + 175.9%, + 498.3% and + 673.0%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.