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Investing.com - Bernstein SocGen Group upgraded Toyota Motor (7203:JP) (NYSE:TM) from Market Perform to Outperform on Monday, while raising its price target to JPY3,500.00 from JPY2,550.00.
The upgrade follows Toyota’s announcement of a 20% return on equity (ROE) target, which Bernstein SocGen views as a significant shift for the traditionally cautious automaker that rarely discloses specific numerical goals.
Bernstein SocGen believes Toyota could achieve this ROE target ahead of the company’s own timeline, citing ongoing acceleration of hybrid electric vehicle (HEV) sales as a short-to-mid-term profit driver.
The research firm also highlighted Toyota’s projected value chain profit growth of JPY165 billion year-over-year in the current fiscal year as a contributing factor to improved financial performance.
Additional ROE improvements are expected from Toyota’s optimization of capital relationships within the Toyota Group, specifically through the buyout of Toyota Industries, according to the analyst report.
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