Disappointing Forecast Drives Toyota Stock Deeper

The automaker's president said COVID-19 "has dealt us a bigger shock than the 2008 financial crisis"

Deputy Editor
May 12, 2020 at 9:01 AM
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Toyota Motor Corp (NYSE:TM) is tumbling today, down 1.3% to trade at $122 after warning that its profit could plunge 80% in 2020 -- its lowest in nine years -- due to the negative effects COVID-19 has had on production. The Japanese automaker's president Akio Toyoda said in a livestreamed media briefing that "the coronavirus has dealt us a bigger shock than the 2008 global financial crisis." 

Toyota has joined many of its sector peers in several choppy weeks of trading sideways, with its two attempts to break north stamped out by the 320-day moving average. The security has found some support at its $120 region, though the descending 60-day moving average looming overhead threatens to add even more pressure to the stock. Coming into today, TM is off 12% for the year.

Analysts are holding out hope for Toyota, with three of the four in coverage calling it a "strong buy." Adding to this, the consensus 12-month price target of $148.68 is a 20.3% premium to last night's close. 

Options players haven't been as optimistic. This is per TM's 10-day put/call volume ratio of 3.49 at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all but 4% of all other readings from the past year, suggesting a much healthier appetite for long puts of late. 

Toyota's Schaeffer's put/call open interest ratio of 2.54, which sits in the 86th percentile of its annual range, echoes this. This implies short-term options traders have rarely been more put-biased in the past 12 months. 

 

 

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