December 27, 2024 – Toyota Motor Corporation’s stock surged 8.78% at the close of the U.S. stock market on December 26th, resulting in a significant increase of $20.9 billion in market capitalization overnight.
According to a report by Nikkei Asia on Wednesday, Toyota is striving to double its return on equity (ROE) target to 20%. This ambitious move has caught the attention of investors. Morgan Stanley analyst Shinji Kakiuchi stated that this plan is feasible if Toyota can enhance its value chain efficiency and identify fresh profit streams.
ROE gauges a company’s efficiency in generating income relative to its shareholders’ equity. In essence, if the rumors are true, Toyota intends to boost earnings for its investors.
Previous reports indicate that, driven by strong demand in the U.S. and Chinese markets, Toyota’s global sales increased for the second consecutive month. However, its global production in November declined for the tenth straight month. Specifically, the automaker produced 869,230 vehicles worldwide in November, representing a 6.2% year-on-year decrease. This drop was steeper than the 0.8% decline recorded in October.
Nevertheless, Toyota’s global sales rose by 1.7% to reach a record high of 920,569 vehicles in November, marking the second consecutive monthly increase.
