Toyota Motor Corporation (TM, Financial) shares listed on the Tokyo Stock Exchange have risen for the second consecutive day, marking the largest two-day gain since August. This surge follows reports suggesting that Toyota plans to double its return on equity (ROE) to 20%. The stock climbed 4.57% and further increased by 6.46% as the news spread.
A Toyota spokesperson mentioned that the company has no specific target or deadline for its ROE. Analysts from Morgan Stanley MUFG Securities indicated that if the report holds true, Toyota would need to enhance its value chain to boost profit margins. They also noted the possibility of Toyota selling its equity holdings to improve shareholder returns as part of its capital efficiency strategy.
Toyota's stock has risen over 20% this year, outperforming the broader Topix index, primarily due to a weaker yen boosting its local currency revenues. However, recent data showed stagnant global sales in November due to weak demand and factory shutdowns.
