Toyota Motor (TM): A Great Chance for Bottom Fishers

Toyota Motor (TM) is showing plenty of improvement in sales since last year, sending estimates higher. The stock is also trading with nice valuations and huge growth rates.

Company Description

Toyota Motor Corp is one of the most well-known car manufacturers in the world. In addition to autos under the Toyota brand, the company also manufactures under the Lexus name.

Improving Sales

On Jul 1 Toyota reported a 6.8% increase in sales for June. Volume through the first 6 months of the year rose 10.6%, based on daily volume.

The company seems to have passed the stigma that followed its mishandling of the Prius recall fiasco. However, there are some new issues with some Lexus models.

Estimates Rising

After analysts weighed the recall versus the recent sales figures, they decided to raise estimates. The full-year Zacks Consensus for full-year fiscal 2010 rose 15 cents to $1.07.

Next year’s estimates are averaging $3.79, up 53 cents. Toyota Motor Corp lost $1.41 last year, so this would be quite a turnaround story if the company hits these targets.

Valuations

Shares of TM are trading at 19 times forward earnings, which is not that impressive. But, if you take those growth rates into consideration you have a PEG of 0.3, a great value.

The price-to-book is a bargain at 0.95 and the price-to-sales is coming in at 0.52.

The Chart

Toyota Motor Corp’s stock has been under severe pressure lately, so this is a risky pick. However, with a shift in the MACD on the recent sales figures, this may be the start of a turn around. A great chance for bottom fishers.

TOYOTA MOTOR CP (TM): Free Stock Analysis Report
Zacks Investment Research

About Bill Wilton 56 Articles

Affiliation: Zacks Investment Research

Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service.

Visit: Zacks Investment Research

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