Toyota Stocks Surge on Reports of Plans to Increase Return on Equity

The Key Takeaways

• U.S. shares of Toyota Motor rose Thursday, following Nikkei’s report that said the company aims for a 20% equity return.
• Analysts were said to be expecting an equity return of 11% for the current fiscal year.
• The news comes days after an announcement that two of Toyota's rivals, Honda and Nissan, are planning on merging.

Toyota Motor (TM) shares listed in the U.S. soared on Thursday after a report stating that Toyota Motor is looking to achieve a return-on-equity (ROE) target of two times.

Nikkei reported that the Japanese car giant was planning on raising its ROE by 20%. That’s about twice what analysts expected for this year.

Bloomberg reported that a Toyota spokesperson said the company doesn’t set a deadline or have definite targets to achieve this figure.

It comes days after Honda and Nissan (HMC) announced their intention to merge. Moody’s Analysts applauded, saying that the merger would benefit both companies. “credit positive” if done properly. In an interview, Carlos Ghosn, the former CEO of Nissan warned that Nissan might face cost cutting. “carnage” This arrangement is a good example.

Toyota’s shares rose over 8% to $196.22 intraday on Thursday and are up close to 7% in 2024.

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