NEW YORK (TheStreet) -- Toyota Motor Corp. (TM) finished the day up 1.0% to $111.59 on Thursday. The Japanese automaker's stock climbed after it announced a proposal to buy back 60 million shares worth $3.5 billion by June.
The buyback will be Toyota's largest since 2003 and its first since since 2008.
Toyota said that it will sell 30 million shares to Japan Trustee Service Bank for 1 yen per share and would cancel the other 30 million shares. "We want to reward our shareholders through this buyback and cancellation," the company said.
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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 several positive factors, 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, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 3.8%. Since the same quarter one year prior, revenues rose by 14.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- TOYOTA MOTOR CORP 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 MOTOR CORP increased its bottom line by earning $6.46 versus $2.19 in the prior year. This year, the market expects an improvement in earnings ($12.06 versus $6.46).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Automobiles industry. The net income increased by 870.8% when compared to the same quarter one year prior, rising from $445.00 million to $4,320.00 million.
- Net operating cash flow has increased to $5,897.00 million or 38.81% when compared to the same quarter last year. In addition, TOYOTA MOTOR CORP has also modestly surpassed the industry average cash flow growth rate of 29.90%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Automobiles industry and the overall market on the basis of return on equity, TOYOTA MOTOR CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full analysis from the report here: TM Ratings Report