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Tesla (TSLA) Shares Crash on Analyst Downgrade, Competitors Gain

Stocks in this article: HMC TSLA GM TM F


Toyota (TM) shares gained 0.27% to close at $127.66. Toyota's share price was boosted by Japanese September auto sales figures showing a 17% increase to 522,760 units.

TheStreet Ratings team rates Toyota as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate Toyota (TM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, notable return on equity, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins." Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Toyota reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Toyota increased its bottom line by earning $6.46 vs. $2.19 in the prior year. This year, the market expects an improvement in earnings ($11.68 vs. $6.46).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Automobiles industry average. The net income increased by 55.8% when compared to the same quarter one year prior, rising from $3,638 million to $5,667 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, Toyota has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Powered by its strong earnings growth of 55.65% and other important driving factors, this stock has surged by 67.76% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • Net operating cash flow has increased to $10,375 million or 17.83% when compared to the same quarter last year. Despite an increase in cash flow, Toyota's average is still marginally south of the industry average growth rate of 18.02%.

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