NEW YORK (TheStreet) -- Shares of Toyota Motor Corp. (TM - Get Report) are down 1.60% to $111.50 in pre-market trade after the Japanese automaker advised U.S. owners to keep passengers out of the front seats of several models until dealers can repair defective air bags, four months after taking similar actions in Japan, Bloomberg reports.
Toyota issued the public warning as the National Highway Traffic Safety Administration increased its efforts to reach at least 4.7 million motorists driving with potentially faulty air bags.
The carmaker yesterday added to its air-bag recalls for the second time since June, when the company joined Honda Motor Co. (HMC - Get Report) , Nissan Motor Co. (NSANY) and Mazda Motor Corp. in instructing dealers in Japan to disable passenger-side air bags and tell owners to prohibit passengers from sitting in the front seat, Bloomberg said.
"This is a very focused attempt to raise awareness with owners of affected vehicles in these particular regions, where we have found the incidence of failures is the highest," a Toyota spokesman said.
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, attractive valuation levels, growth in earnings per share, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 0.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- TOYOTA MOTOR CORP's earnings per share improvement from the most recent quarter was slightly positive. 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 ($11.83 versus $11.17).
- The net income growth from the same quarter one year ago has exceeded that of the Automobiles industry average, but is less than that of the S&P 500. The net income increased by 2.4% when compared to the same quarter one year prior, going from $5,667.00 million to $5,803.00 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 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