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Toyota's Gets Its Mojo Back

 February 08, 2012 06:06 AM
 

Toyota's (ADR: TM) stock is leading the rebound in Japanese stocks and is at a 6-month high on an FY2011 (to March 2012) earnings upgrade as other major Japanese companies were slashing earnings and reporting deficits on a recovery in U.S. share.
The Camry model U.S. sales were up 56% YoY in January followed by a 50% surge in Honda's civic. Toyota US sales in January were up 7.5% YoY versus a 6.1% decline for GM and a 7.3% increase for Ford. The firm-wide U.S. January volume growth was still slower tan Honda (+8.8%) and Nissan (+10.4%), and only half as rapid a growth as South Korea's Hyundai (+14.7%) and Kia (+27.8%).
The company's 2012 planned production volume could well put it back in the number one spot in production volume, back again above GM and Volkswagen. However, the rally is already approaching one potential turning point at $85 on the ADR, and it remains to be seen whether the stock can transition to a bullish cup & handle formation. Management has committed to producing 3 million vehicles in Japan this year, but at JPY76/USD, will be losing on every unit exported as their breakeven exchange rate is JPY85/USD, so it looks like the big earnings boost will come from even further cost cutting.



 
Tokyo Takes provides additional commentary on Japan stocks to The JapanInvestor.com weekly newsletter. To obtain a free trial subscription to The Japan Investor market letter, please visit: www.japaninvestor.com

Rich
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