Toyota Motor Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Toyota Motor Corporation (TSE:7203) just released its latest full-year results and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 2.3% to hit JP¥45t. Statutory earnings per share (EPS) came in at JP¥366, some 9.0% above whatthe analysts had expected. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Toyota Motor

Taking into account the latest results, the consensus forecast from Toyota Motor's 19 analysts is for revenues of JP¥46t in 2025. This reflects an okay 2.3% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 12% to JP¥324 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of JP¥46t and earnings per share (EPS) of JP¥335 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at JP¥3,587, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Toyota Motor, with the most bullish analyst valuing it at JP¥4,300 and the most bearish at JP¥2,300 per share. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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 2025 expected to display 2.3% growth on an annualised basis. This is compared to a historical growth rate of 8.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.2% annually. Factoring in the forecast slowdown in growth, it seems obvious that Toyota Motor is also expected to grow slower than other industry participants.

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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Toyota Motor going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Toyota Motor (including 2 which are a bit concerning) .

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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.