Buffett Brain · Research note
Score updated 5 Oct 2026 · analysis from 2 Jun 2026
7203.T· Consumer Discretionary
Toyota Motor
Toyota builds the finest cars in the world yet earns a 4.4 percent return on the capital it must keep pouring into the business.
Buffett fit
Weak fit
Owner
7
Durability
85
Management
40
Price
58
Score updated 5 Oct 2026 · analysis from 2 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Discretionary stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned all of Toyota, I would ask one question first: how much cash can I take out at the end of the year?
The full reasoning comes with a free account.
The durability here is genuine. Toyota has built cars for nearly a century, its brand is among the most trusted on earth, and the worst earnings decline in the record was a manageable 17.9 percent.
The full reasoning comes with a free account.
Management runs the balance sheet conservatively in some ways and aggressively in others.
The full reasoning comes with a free account.
The stock looks cheap on the surface at a price to earnings ratio of 10.3, and the earnings yield of 9.7 percent is tempting.
The full reasoning comes with a free account.
Free account
Read the full Toyota Motor analysis free
- The full reasoning behind all four pillars
- Graham, Lynch and Greenblatt on the same stock
3 full analyses a week · no card needed
For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1Among the most durable franchises in the world, with the worst earnings drop on record only 17.9 percent, signaling unusual stability for a cyclical manufacturer.
- 2Fortress ability to carry its debt, with interest coverage of 60 times earnings before interest and tax.
- 3Revenue has compounded at 10.9 percent and reported earnings per share at 18.0 percent, showing the franchise can still grow.
- 4Management has shrunk the share count by 1.5 percent a year, returning ownership to shareholders rather than diluting it.
Concerns
7- 1Returns on capital are poor for a business this large, at 4.4 percent on a trailing basis and only 5.5 percent over five years, far below what a great business earns.
- 2 yield is just 0.45 percent, so almost none of the reported profit reaches an owner as spendable cash.
- 3 is under 5 percent of net income, meaning the headline earnings are consumed by factories and finance receivables.
- 4Net debt sits at four times EBITDA, a heavy load that the captive finance arm only partly explains.
Price history
$2,892+45.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Toyota sells roughly ten million vehicles a year and books a 16.7 percent and a 7.4 percent , which is thin once you remember that every yen of profit rests on factories, tooling, and a lending arm that finances the cars. Revenue has compounded at 10.9 percent and reported earnings per share at 18.0 percent, but the cash that actually reaches the owner is a different story. has run at less than 5 percent of net income, so most of the reported profit is plowed straight back into the machine.
How this analysis has moved
The call has held across 2 reviews.
Sep 27, 2026 → Oct 4, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Consumer Discretionary
Free weekly email
Liked the read on 7203.T? Get the next ones on Monday.
Every Monday: the stocks most of the seven investors newly agree on. One email, unsubscribe any time.
Research, not investment advice.
See the Buffett analysis of Toyota Motor
The score, the checklist and the full reasoning open with a free account. You get 3 full analyses a week, and this stock is the first one. No card needed.
Create a free account3 full analyses a week · no card needed
Already have an account? Sign in