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Watch Out For NYSE- Listed Automobile ADR - Toyota Motor Corporation

Jun 22, 2023 | Team Kalkine
Watch Out For NYSE- Listed Automobile ADR - Toyota Motor Corporation

Toyota Motor Corporation

Toyota Motor Corp (NYSE: TM) is a Japan-based company engaged in the automobile business, finance business and other businesses. The Company operates in three business segments. The Automobile segment is engaged in the design, manufacture and sale of sedans, minivans, 2box, sports utility vehicles, trucks and related vehicles, as well as related parts and products.

Recent Financial and Business Updates:

  • In the fiscal year 2023, there was a significant increase in consolidated vehicle unit sales both in Japan and overseas. The total unit sales reached 8,822 thousand units, representing a growth of 591 thousand units or 7.2% compared to the previous fiscal year. Within this, vehicle unit sales in Japan rose by 145 thousand units, equivalent to a growth of 7.5%, totaling 2,069 thousand units. Overseas vehicle unit sales also saw a notable increase of 446 thousand units, accounting for a growth of 7.1%, reaching 6,753 thousand units.
  • The financial results for FY2023 are as follows:
  • Sales revenues amounted to 37,154.2 billion yen, reflecting an increase of 5,774.7 billion yen or 18.4% compared to FY2022.
  • Operating income was 2,725.0 billion yen, indicating a decrease of 270.6 billion yen or 9.0% compared to FY2022.
  • Income before income taxes reached 3,668.7 billion yen, showcasing a decrease of 321.7 billion yen or 8.1% compared to FY2022.
  • Net income attributable to Toyota Motor Corporation was 2,451.3 billion yen, showing a decrease of 398.7 billion yen or 14.0% compared to FY2022.
  • Cash and cash equivalents at the end of FY2023 increased by 1,403.3 billion yen, or 23.0%, to 7,516.9 billion yen compared to the end of FY2022.
  • Net cash flows from operating activities resulted in a cash increase of 2,955.0 billion yen in FY2023. Net cash provided by operating activities decreased by 767.5 billion yen from 3,722.6 billion yen in FY2022.
  • Looking ahead to FY2024, the forecasted consolidated results are as follows:
  • Sales revenues are expected to reach 38,000.0 billion yen, indicating an increase of 2.3% compared to FY2023.
  • Operating income is projected to be 3,000.0 billion yen, representing an increase of 10.1% compared to FY2023.
  • Income before income taxes is forecasted to reach 3,690.0 billion yen, reflecting a slight increase of 0.6% compared to FY2023.
  • Net income attributable to Toyota Motor Corporation is expected to be 2,580.0 billion yen, showing an increase of 5.3% compared to FY2023.


Technical Observation (on the daily chart)

The price of TM stock has shown a consistent upward trend since making its 52-week low on September 30, 2022, with a return of approximately 20.65%. Currently, the stock is near an important resistance of USD 160.00-USD 170.00, from where price has taken correction in the past. A breakout in upward direction from this range would likely initiate a new short-term trend in the up direction with targets of USD 185.00-USD 190.00. The RSI (14 period) momentum indicator is at a value of 60.37, correcting from the overbought area, with expectations of some consolidation or a short-term correction before the continuation of the upward trends. Moreover, the price is currently positioned above both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support levels.

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As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Toyota Motor Corp (NYSE: TM) at the current price of USD 156.97 as of June 22, 2023, at 09:20 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is June 22, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.