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Toyota worth more then Wal-Mart
Toyota worth more then Wal-Mart
Toyota market cap passes Wal-Mart as shares rise
http://today.reuters.com/business/ne...-SHARES-DC.XML
Quote:
Toyota market cap passes Wal-Mart as shares rise
TOKYO (Reuters) - Shares in Toyota Motor Corp. <7203.T> hit a record high on Friday, sending the auto maker's market value above $200 billion -- more than that of U.S. retail giant Wal-Mart Stores <WMT.N> -- and analysts said the issue could keep rising as profits look to grow even faster next year.
Climbing for the fourth session in five days, shares in Japan's top car maker touched an all-time peak of 6,560 yen in early trade, putting its market capitalization -- a measure of how much investors believe a company is worth -- at $200.7 billion at current exchange rates.
Even at the closing share price of 6,420 yen, Toyota's market cap of $196 billion would make it the world's ninth most valuable company, ahead of Wal-Mart, whose market cap stood at $195 billion as of Thursday.
"Fundamentally, there's nothing negative you can point to with Toyota," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
"With the broader market and start-ups suffering right now, there's a flight to quality, and institutional and retail investors alike are looking for large-cap, blue-chip stocks that they feel are safe," he added.
With an arsenal of popular cars and a lean cost structure, Toyota has long dwarfed rival auto makers in terms of market capitalization. By this yardstick it is now worth more than double the combined value of DaimlerChrysler AG <DCXGn.DE>, General Motors Corp. <GM.N> and Ford Motor Co. <F.N>.
"Interest in Toyota is high, and we think there's plenty of upside for the shares," Deutsche Securities analyst Tsuyoshi Mochimaru wrote in a report last week. Mochimaru has a "Buy" rating on Toyota, with a 12-month target price of 7,200 yen.
PROFITS TURN UP
For much of 2005, many analysts' view that Toyota's shares were undervalued went unheeded. The stock wavered around 4,000 yen for more than half the year as investors focused on Toyota's operating profits, which were dragged down by its heavy capital spending.
But after three straight quarters of profit declines, Toyota last week posted a 14 percent jump in October-December operating profit as robust demand for its cars in North America, big cost cuts and a weaker yen helped absorb the cost of expanding its manufacturing facilities around the world.
After the stellar results, Mizuho Securities also raised its target price for Toyota shares to 7,200 yen, from 6,300 yen.
Analyst Yoshio Watanabe said the company's midterm prospects were solid given its leading position in industrialized countries thanks to a competitive product line and technological edge, through vehicles like the Prius hybrid sedan.
He added that Toyota also stood to prosper rapidly in Asia and other emerging markets, having spent aggressively on manufacturing facilities to roll out more vehicles.
Analysts predict the pace of Toyota's operating profit growth to pick up next business year after an expected rise of 5.5 percent this year. A survey of 21 brokerages put the firm's profit at 1.966 trillion yen ($16.7 billion) for the year to March 2007, up 11 percent from a consensus forecast for 2005/06.
While Toyota has said its capital spending is likely to stay high next year -- it has set aside a record 1.4 trillion yen for this year -- analysts expect a big enough boost to revenues from the new Camry sedan, Tundra pickup, IMV, Lexus LS and other strategic models to absorb any impact on its earnings.
Many brokerages have a 12-month target above 7,000 yen for Toyota, but Nikko Citigroup analyst Noriyuki Matsushima reckons that is conservative.
Based on a 2006/07 price-to-cash flow ratio of 14 -- the midpoint between the historical and average five-year highs of the multiple -- Matsushima raised his target price for Toyota to 10,000 yen from 7,000 yen last week.
"Not only do we consider Toyota highly cost-competitive in established areas, we believe it has also a strong lead over competitors in commercializing new technologies," he wrote in a report on February 8.
"Toyota's expansion of its global production network in Europe, North America, Asia and elsewhere is beginning to produce results, and we anticipate considerable earnings contributions in the coming years," he added.
Hopes are also high that Toyota will raise its dividend to 85 yen per share in the year to March 31, up from 65 yen last year, and incrementally increase that toward 100 yen to bring its dividend payout ratio to its stated goal of 30 percent.
Toyota's shares gained 1.58 percent on Friday, while the main Nikkei average <.N225> lost 2 percent. Toyota has put on 4.9 percent so far this year, while the Nikkei has lost 2.5 percent.
($1=117.64 Yen)
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