Toyota Feeling U.S. Slowdown

Toyota Motor (TM) continues to expand its production capacity in a manner that increases efficiency and meets local demand, powering it to emerge as the world’s financially strongest automaker. A strong presence in North America has been further consolidated by gaining market share from the leading U.S. automakers.

Moreover, the company also has a strong cash flow and a strong balance sheet. However, Toyota is unable to offset sales losses in America even as it continues an aggressive expansion in China, the Middle East, and other emerging markets.

A sluggish U.S. economy, rising costs, pricing pressures, and huge capital expenditures prompt us to rate the stock a Hold with a six-month target price of $78.00.

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