Toyota Motor Corp. Back on Track

by Sam Collins | November 6, 2012 1:27 am

Toyota Motor Corp. Back on Track

Toyota Motor Corp. (NYSE:TM[1]) — For our Stocks to Sell in March[2], I said, “Production problems related to natural catastrophes continue. Analysts look for earnings to be limited by margin pressures, customer quality concerns and a stronger yen.”

Since then, Toyota stock fell from a high of $87.15 in April to a low of $72.56 in July. However, on Monday, Toyota reported an increase in profits of $3.28 billion ($1.04 per share) for its fiscal second quarter. The company raised its outlook for the fiscal year ending March 31, 2013, to $3.09 per share. Most analysts that follow TM raised their estimates as well, and changed their overall rating to a “buy.”

Technically, TM broke through its 50-day and 200-day moving averages on a high-volume price gap. Accumulation has been high since October, and this break confirms that the stock is back on track.

After a positive reaction to earnings, stocks will often succumb to profit-taking, and so long-term investors should plan to buy the stock under $80.

11 06 12 tm 300x217 Toyota Motor Corp. Back on Track
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chart key 300x84 Toyota Motor Corp. Back on Track

Endnotes:
  1. TM: http://studio-5.financialcontent.com/investplace/quote?Symbol=TM
  2. Stocks to Sell in March: http://investorplace.com/2012/03/stocks-to-sell-anr-fslr-nok-tm-ubs-x/

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