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Toyota Motor Corporation (TM) Laps the Stock Market: Here's Why

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Toyota Motor Corporation (TM - Free Report) ended the recent trading session at $178.15, demonstrating a +1.39% swing from the preceding day's closing price. This change outpaced the S&P 500's 0.82% gain on the day. On the other hand, the Dow registered a loss of 0.22%, and the technology-centric Nasdaq increased by 1.77%.

The company's stock has climbed by 0.41% in the past month, falling short of the Auto-Tires-Trucks sector's gain of 14.73% and the S&P 500's gain of 0.8%.

The investment community will be paying close attention to the earnings performance of Toyota Motor Corporation in its upcoming release. On that day, Toyota Motor Corporation is projected to report earnings of $4.36 per share, which would represent a year-over-year decline of 35.98%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $78.36 billion, down 3.91% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $21.56 per share and a revenue of $304.34 billion, representing changes of -14.95% and -2.48%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for Toyota Motor Corporation. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, there's been a 0.68% fall in the Zacks Consensus EPS estimate. Toyota Motor Corporation currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Toyota Motor Corporation is presently being traded at a Forward P/E ratio of 8.15. Its industry sports an average Forward P/E of 6, so one might conclude that Toyota Motor Corporation is trading at a premium comparatively.

Meanwhile, TM's PEG ratio is currently 0.31. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Automotive - Foreign industry currently had an average PEG ratio of 0.82 as of yesterday's close.

The Automotive - Foreign industry is part of the Auto-Tires-Trucks sector. At present, this industry carries a Zacks Industry Rank of 159, placing it within the bottom 37% of over 250 industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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