Skip to main content

NEW YORK (TheStreet) -- Toyota Motor (TM) - Get Free Report stock is rising 0.65% to $124.66 in late-morning trading Friday as the Japanese automaker continues to lead the auto industry in global sales, Reuters reports.

The company sold 8.35 million vehicles worldwide in the first 10 months of the year, outpacing Volkswagen (VLKAY), which sold 8.26 million vehicles in the same period.

Toyota has maintained its top position in the auto industry for the past four months as Volkswagen sales were dented by an emissions scandal, Reuters added.

Additionally, the automaker reported a 1.5% decline in October sales in Japan, with 176,694 vehicles sold.

In the U.S., Toyota fared better last month, with a 13% increase in sales to 204,045 cars, but still falling behind domestic carmakers General Motors (GM) and Ford Motor (F).

Separately, TheStreet Ratings team rates TOYOTA MOTOR CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate TOYOTA MOTOR CORP (TM) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TM's revenue growth has slightly outpaced the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 9.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TOYOTA MOTOR CORP has improved earnings per share by 17.0% 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 MOTOR CORP increased its bottom line by earning $11.46 versus $11.17 in the prior year. This year, the market expects an improvement in earnings ($12.46 versus $11.46).
  • 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 16.4% when compared to the same quarter one year prior, going from $4,473.00 million to $5,207.00 million.
  • After a year of stock price fluctuations, the net result is that TM's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • You can view the full analysis from the report here: TM

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.