Results: Toyota Motor Corporation Exceeded Expectations And The Consensus Has Updated Its Estimates

Toyota Motor Corporation (TSE:7203) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a credible result overall - although revenues of JP¥12t were what the analysts expected, Toyota Motor surprised by delivering a (statutory) profit of JP¥64.56 per share, an impressive 21% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Following last week's earnings report, Toyota Motor's 22 analysts are forecasting 2026 revenues to be JP¥49t, approximately in line with the last 12 months. Statutory earnings per share are expected to dive 29% to JP¥234 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¥243 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

View our latest analysis for Toyota Motor

The consensus price target held steady at JP¥3,001, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Toyota Motor, with the most bullish analyst valuing it at JP¥3,400 and the most bearish at JP¥2,400 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Toyota Motor's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Toyota Motor's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 1.9% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Toyota Motor.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Toyota Motor. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Toyota Motor's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. At Simply Wall St, we have a full range of analyst estimates for Toyota Motor going out to 2028, 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 4 warning signs with Toyota Motor (at least 2 which are significant) , and understanding these 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.