Results: Toyota Motor Corporation Beat Earnings Expectations And Analysts Now Have New Forecasts

A week ago, Toyota Motor Corporation (TSE:7203) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 3.8% to hit JP¥12t. Toyota Motor also reported a statutory profit of JP¥166, which was an impressive 68% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Toyota Motor

Taking into account the latest results, the consensus forecast from Toyota Motor's 21 analysts is for revenues of JP¥49t in 2026. This reflects a reasonable 5.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to sink 17% to JP¥322 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥49t and earnings per share (EPS) of JP¥321 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of JP¥3,267, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Toyota Motor analyst has a price target of JP¥3,800 per share, while the most pessimistic values it at JP¥2,400. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Toyota Motor shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Toyota Motor's revenue growth is expected to slow, with the forecast 4.0% annualised growth rate until the end of 2026 being well below the historical 12% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.1% per year. So it's pretty clear that, while Toyota Motor's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at JP¥3,267, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Toyota Motor. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Toyota Motor analysts - going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Toyota Motor (at least 2 which are a bit unpleasant) , and understanding them should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.