Toyota Motor Corp (ADR) (NYSE:TM) — This is one of the world’s largest automobile manufacturers and also one of the largest consumer finance companies in the United States. Toyota consistently receives accolades for its high quality control and manufacturing capabilities.
Analysts at S&P Capital IQ said the company’s new and refreshed vehicles should help revenue grow 5% in fiscal 2015 (ending in March). They estimate 2015 earnings will be roughly flat at $11.43 per share and then jump 14% to $13.07 in fiscal 2016. Profits should be helped by a weaker yen versus the U.S. dollar, as well as the company’s focus on high-growth emerging markets.
Capital IQ has a “strong buy” rating on TM stock with a 12-month price target of $170. This is more than 20% above the current price and based on a modest P/E multiple of 14.9 times expected fiscal 2015 earnings per share.
TM stock consolidated between approximately $108 and $122 for most of 2014. It broke from the consolidation in October with a high-volume breakaway gap, rapidly establishing an orderly bull channel, which it has maintained for six months. The channel has support at the 50-day moving average and resistance at the March high just below $146.
Buy TM stock under $138 with a trading target of $150 for a return of 9%. Investors will no doubt want to hold this high-quality automaker for Capital IQ’s $170 target, as well as its dividend. TM stock currently has a forward annual yield of 1.8%, and analysts expect steady growth in its payout.
