# Toyota Motor (TSE:7203)

As of Sun 8 Nov 2026 12:00 UTC (weekly snapshot). Full report: https://standard-equity.report/TSE/7203

Price ¥3,338.00 (JPY), market cap ¥39.17T, Consumer Discretionary - Auto Manufacturers.

## Valuation

- SE Reference Value (expected value, DCF): ¥6,577.03 (central 50% range ¥5,783.19 to ¥7,725.21), +97% against the price; range width narrow
- SE Grade: 1 of 3 (Value 3, Quality 2, Moat 1)
- Consensus Rating: Buy (Strong buy 10, Buy 5, Hold 4, Sell 0, Strong sell 0)
- Consensus Price (mean): ¥4,033.68, +21% against the price

## Key metrics

Financials in JPY. Peer percentile: 100 = best in the peer group.

| Metric | Now | 5Y median | 10Y median | Peers |
|---|---|---|---|---|
| Revenue | ¥53.02T | CAGR 13.2% | CAGR 7.0% | P97 |
| Revenue growth | 7.4% | 15.3% | 6.5% | P43 |
| Gross margin | 16.9% | 19.0% | 18.0% | P30 |
| Operating margin | 7.5% | 9.5% | 8.1% | P63 |
| Net margin | 8.1% | 9.1% | 7.9% | P77 |
| FCF yield | -2.1% | -1.4% | -0.6% | P17 |
| FCF margin | -1.5% | -1.1% | -0.5% | P20 |
| FCF / net income | -0.19x | -0.10x | -0.04x | P15 |
| ROIC | 12.2% | 10.3% | 10.3% | P33 |
| ROE | 11.5% | 11.5% | 10.3% | P48 |
| ROA | 4.2% | 4.2% | 3.8% | P33 |
| EPS | ¥364.95 | CAGR 13.3% | CAGR 10.6% | - |
| EPS growth | 2.7% | -1.7% | 10.5% | P45 |
| Book value per share | ¥3,170.00 | CAGR 13.2% | CAGR 11.5% | - |
| FCF per share | -¥68.45 | CAGR 25.7% | CAGR 42.5% | - |
| Dividend per share | ¥95.00 | CAGR 15.1% | CAGR 9.5% | - |
| Dividend yield | 2.8% | 3.0% | 3.1% | P52 |
| Payout ratio (FY2026) | 32.2% | 25.3% | 30.1% | P32 |
| Diluted shares | 11,733.1M | CAGR -1.7% | CAGR -1.8% | P88 |
| Buyback yield | 9.4% | 1.7% | 1.9% | P88 |
| Debt/equity | 0.06x | 0.09x | 0.08x | P29 |
| Enterprise value | ¥28.41T | CAGR 10.7% | CAGR 7.4% | P97 |
| Long-term debt | ¥25.65T | CAGR 6.8% | CAGR 16.4% | P97 |

## Company Note (Q2 2027)

Written by AI from the data above.

**Toyota's fiscal second quarter showed sales strength** not reaching the bottom line. Revenue rose 8.6% year on year, helped by foreign exchange effects and higher vehicle sales in Japan, while diluted EPS fell 10.1%. Management credited swift mitigation of Middle East and flood-related disruption, plus cost reductions with suppliers, and said price revisions and a smaller U.S. tariff hit returned North America to profitability. The shares look mispriced on that recovery: SE fair value of ¥6,577 is 97.0% above the price.

**Management raised its full-year operating income forecast** and kept consolidated vehicle sales unchanged. It lowered the Toyota and Lexus sales outlook and the electrified vehicle ratio, citing slower conditions in China, and held the dividend at ¥100. Analysts asked about adapting to battery EV demand in China and how North America returns to profit. One executive said "10 million units should be covered by the hybrid and other main models." Revenue growth is slowing from the prior quarter even as profit guidance moved up.

**Consensus is more cautious** than the raised guidance. Analysts expect FY2027 EPS growth of +5.9% on revenue growth of +7.0%, a pace below the company's recent compounding. They then look for EPS to accelerate by +12.6% in FY2028. Our own projection for FY2027 sits above consensus, though its interval is wide. The company has beaten EPS estimates in 8 of the last 8 quarters, so the higher operating income forecast could feed further upward revisions, provided China weakness and tariffs do not erode the margin gains.

**Returns have improved**: ROIC moved from 7.8% in FY2023 to 10.3% in FY2026, and is better on the three-year trend. Cash conversion is the weak spot. Free cash flow runs at -0.19x net income, and the FCF margin of -1.5% sits below its five-year median of -1.1%. It ranks in the bottom quarter of the 31 companies nearest in size, even though it improved over three years. Net margin holds steady at 8.1%. Share count and cash conversion are what hold Quality back.

**The stock trades** at 9.1 times trailing earnings, cheaper than its own ten-year median of 9.8 times. SE fair value of ¥6,577 is 97.0% above the price, and the narrow model interval gives it high confidence. The mean analyst target of ¥4,034 is 20.8% above the price, a far smaller gap than SE fair value implies. For the price to close toward fair value, results need to land near the model's base case. Operating income falling short of the raised guidance would show they are not.

**The SE Score** is 1 of 3. Quality earns two stars because a ROIC of 12% clears a 6.0% cost of capital comfortably and the balance sheet holds net cash, while free cash flow has lagged net income. Moat earns one star, as ROIC topped 15% in only one of ten years and the five-year average sits low among its peers. Value earns three stars, with SE fair value 97.0% above the price, but the price left the overall score where the business tier set it.

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Weekly snapshot, not live data. For information only, not investment advice. Methodology: https://standard-equity.report/methodology