On Saturday, UBS has revised its price target for Toyota Industries (OTC:TYIDF) Corp. (6201:JP) (OTC: TYIDF), reducing it to ¥14,600 from the previous ¥16,600, while retaining a Buy rating on the stock. The adjustment reflects a tempered outlook for the company's near-term sales and earnings.
The firm anticipates a shift in the relationship between Toyota Motor (NYSE:TM) and its suppliers, including a reduction in cross-shareholdings and the commencement of supplier restructuring by 2025. Over the next 6 to 12 months, UBS projects an acceleration in profit growth for Toyota Industries and expects the discount on asset value to diminish, supporting the decision to maintain a Buy rating.
Despite the positive long-term outlook, UBS foresees a delay in the recovery of forklift sales and orders, now expected to occur about six months later than initially predicted. This adjustment has led to a decrease in the forecasted operating profit for fiscal years 2025 to 2026 and a consequent reevaluation of the company's valuations.
The revised earnings forecasts have resulted in a reduction of the estimated earnings per share (EPS) by 5% for the fiscal year ending March 2025, and by 2% for the following fiscal year. This reassessment of earnings projections and asset value has culminated in the lowered price target for Toyota Industries shares.
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