Toyota Upgraded, Mitsubishi UFJ Rating Maintained

Includes: MTU, TM
by: Steven Towns

Japanese stocks soldoff on concern over a possible Fed rate hike announcement and the news about BP's (NYSE:BP) Prudhoe Bay oil production shutdown. Even an analyst upgrade of Toyota (NYSE:TM), which reported record quarterly earnings after Friday's market close in Tokyo and an upward revised financial forecast of Mitsubishi UFJ (NYSE:MTU) couldn't stop the bleeding for two of Japan's biggest publicly traded firms.

FISCO news service of Japan reports that Mizuho Securities upgraded Toyota to a "1" from a previous rating of "2." It maintained its target share price of 7,200 yen (ADR equivalent of $125.) Mizuho sees strength in North America and Europe as covering any weakness in Asia, which I interpret to mean specifically in Japan were overall sales are lower for most auto makers but Toyota nonetheless still added to its #1 ranked market share. Toyota's ordinary shares (Tokyo: 7203) lost 0.82% on Monday, closing at 6,030 yen ($104.88) while its ADRs closed at $108.14 on Friday. In intra-day trading Toyota is down 2.13% at $105.84. Click here for a recap of Toyota's record Q1 earnings.

Merrill Lynch Japan maintained its "buy" rating and 1,710,000 yen (ADR equivalent of $14.87) target on Mitsubishi UFJ Financial Group (MTU) (Tokyo: 8306). ML raised its full-year financial forecast based on Mitsubishi UFJ's Q1 earnings and expectation of a positive impact from a rising interest rate environment. Mitsubishi UFJ ordinary shares lost 2.53% Monday to close at 1,540,000 yen ($13.39). Its ADRs closed Friday at $13.68 and are currently trading 2.1% lower intra-day at $13.39. See a summary of Mitsubishi UFJ's Q1 earnings here.

Toyota Motor Corp (TM) 1-year chart (intra-day A.M.):

Mitsubishi UFJ Financial Group (MTU) 1-year chart (intra-day A.M.):