How Will Toyota (TM) Stock React To Strong First Half Sales Results?

NEW YORK (TheStreet) -- Toyota Motor Corp. (TM) maintained its global sales lead over Volkswagen (VLKAY) in the first six months of 2014 as rising U.S. demand for SUVs paced a first half record, Bloomberg reports.

Deliveries for Toyota, including its Hino Motors (HINOY) and Daihatsu Motor Co. units, rose 3.8% to 5.1 million vehicles in the first half, the company said.

Volkswagen reported sales of about 5.07 million units, including results for its heavy truck units.

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Deliveries worldwide for General Motors (GM) were up 1.4% to 4.92 million cars and trucks, as increasing sales in China and the U.S. helped to offset declines in Europe and South America.

Shares of Toyota closed yesterday at $120.58

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

"We rate TOYOTA MOTOR CORP (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 revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. 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:

  • The revenue growth came in higher than the industry average of 21.5%. Since the same quarter one year prior, revenues rose by 44.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • TOYOTA MOTOR CORP has improved earnings per share by 16.8% 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 $11.17 versus $6.46 in the prior year. This year, the market expects an improvement in earnings ($12.59 versus $11.17).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Automobiles industry average. The net income increased by 17.1% when compared to the same quarter one year prior, going from $2,737.00 million to $3,204.00 million.
  • Net operating cash flow has significantly increased by 61.50% to $9,495.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 29.56%.
  • You can view the full analysis from the report here: TM Ratings Report

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