Reasons to Buy Toyota (TM) in '08 -WSJ
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A Wall Street Journal article published this morning highlighted reasons why Toyota Motor (NYSE: TM) could be a quite obvious buy.
The article, entitled "Toyota Stock May Be a Buy", pointed out how well the Company performed last year, on an operational basis, possibly knocking General Motors (NYSE: GM) off its 'world's largest auto seller' throne, but how bad its stock did. Much of the negative sentiment surrounding Toyota last year was the result of economic factors: the Company is cyclical and was highly affected by the weak U.S. auto market, higher fuel prices, and a strengthening yen vs. the dollar.
As the outlook for 2008 certainly appears to be more bearish than last year, why are analysts now jumping on the Toyota band wagon? Well, to start, many analysts have always been positive on Toyota, however, short-term headwinds have recently outweighed the long-term promise for Toyota. Now that the stock is trading just above its 52-week low, and seems to be showing support from buyers at this level, analysts now must consider factors that could drive the stock higher in '08.
According to the WSJ article, one of the major reasons why analysts are considering Toyota a 'Buy' is because of the Company's strong position within emerging markets that will be the world's top grower's in '08: Russia, India, and China. In fact, some analysts say that Wall Street isn't currently pricing in the strong growth projections by Toyota in these regions. At Toyota's year-end news conference in December, President, Katasuaki Watanabe forecasted a record 9.85 million vehicles will be sold globally in 2008.
Quoted in the article, an analyst from UBS Securities used a clever analogy to capture the optimism some investors are feeling towards Toyota for 2008: "They aren't looking 10 kilometers down the road, they are looking 100 kilometers down the road..."
The article, entitled "Toyota Stock May Be a Buy", pointed out how well the Company performed last year, on an operational basis, possibly knocking General Motors (NYSE: GM) off its 'world's largest auto seller' throne, but how bad its stock did. Much of the negative sentiment surrounding Toyota last year was the result of economic factors: the Company is cyclical and was highly affected by the weak U.S. auto market, higher fuel prices, and a strengthening yen vs. the dollar.
As the outlook for 2008 certainly appears to be more bearish than last year, why are analysts now jumping on the Toyota band wagon? Well, to start, many analysts have always been positive on Toyota, however, short-term headwinds have recently outweighed the long-term promise for Toyota. Now that the stock is trading just above its 52-week low, and seems to be showing support from buyers at this level, analysts now must consider factors that could drive the stock higher in '08.
According to the WSJ article, one of the major reasons why analysts are considering Toyota a 'Buy' is because of the Company's strong position within emerging markets that will be the world's top grower's in '08: Russia, India, and China. In fact, some analysts say that Wall Street isn't currently pricing in the strong growth projections by Toyota in these regions. At Toyota's year-end news conference in December, President, Katasuaki Watanabe forecasted a record 9.85 million vehicles will be sold globally in 2008.
Quoted in the article, an analyst from UBS Securities used a clever analogy to capture the optimism some investors are feeling towards Toyota for 2008: "They aren't looking 10 kilometers down the road, they are looking 100 kilometers down the road..."
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