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Stiffer competition and persistently increasing material costs were cited by UBS as motivating factors of a move to a “Neutral” rating on the stock.
The bank’s analysts expect that profits will decline more than 10% over the next year as auto demand remains under pressure and higher costs weigh on the bottom line. Further, the expectation of stronger competition from other automakers tempered expectations among the analysts.
In the near term, the team indicated a laser focus on supply chain improvements is likely in order. As such, Toyota (NYSE:TM) may focus more on its suppliers’ stability and earnings results rather than its own earnings.
Shares of Toyota (TM) declined 1.25% shortly after Thursday’s market open.
Read more on the Japanese automaker’s EV initiatives.
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Image and article originally from seekingalpha.com. Read the original article here.