Toyota Earnings: Fiscal 2024 Is Off to a Strong Start, With Revenue Up 24%

Toyota started fiscal 2024 with a strong recovery from the semiconductor shortage that allowed EPS to rise 80.3% year over year to JPY 96.74, which beat the JPY 61.81 Refinitiv consensus. We are raising our fair value estimates to JPY 2,500 per share from JPY 2,400 and $171 from $169 on the time value of money, higher equity income, and for the U.S. dollar fair value, a slightly stronger yen to translate our yen model to dollars. Consolidated vehicle volume rose by over 15% to help drive total company operating income up 93.7% and operating margin up 380 basis points to 10.6%. Nearly every geographic market improved, with the exception of a fiercely competitive Chinese market sending equity method income there down JPY 25.4 billion. North American operating margin rose by only 40 basis points to 3.0%, but a new Tacoma due in the third quarter and the recently launched Grand Highlander three-row crossover may help fiscal 2024 margin later.