Toyota Will Recover From the Recall Disaster Just Like Ford and Honda Did - Goldman Sachs

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 |  Includes: F, HMC, NSANY, TM
by: The Business Insider


In a February auto industry presentation, Goldman Sachs shows how both Ford (NYSE:F) and Honda (NYSE:HMC) once had nasty recalls of their own in the past, yet recovered.

Thus Toyota (NYSE:TM), in the long run, is likely to do so as well -- it just might take a few years for both market share and the stock to fully recover:


ChartClick to enlarge


ChartClick to enlarge

At some point the stock is cheap. Toyota is trading at a low Price to Book (P/B) ratio, according to Goldman, even going back as far as 1995:

chart

chart

Still, we'd point out that Toyota hits a much lower Price to Book during March 2009, when markets hit their recent lows. While it looks relatively small on the chart shown here, it equates to Toyota ADR shares' 52-week low being near $57, vs. $76 now. Thus while media pessimism may seem substantial, Toyota shares aren't exactly in crisis mode. They might be cheap, but they don't look deeply oversold at all.
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Disclosure: No positions