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Module 3: Market Multiple Valuation. Mairin Talerico. Snapshot of Toyota. Limited liability, joint-stock company incorporated under Commercial Code of Japan; started in 1930s Primarily in automotive industry, but also financial services and others Sold 9.98 million vehicles in fiscal 2013

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Snapshot of toyota
Snapshot of Toyota

Limited liability, joint-stock company incorporated under Commercial Code of Japan; started in 1930s

Primarily in automotive industry, but also financial services and others

Sold 9.98 millionvehicles in fiscal 2013

Sell in 170 different countries and regions

Primary markets: Japan, North

America, Europe and Asia


Toyota s enterprise value
Toyota’s Enterprise Value

  • Yahoo Finance Market Cap = $186.78 billion (compared to $406B)

  • Yahoo Finance EV = $332.37 billion (compared to $450B)

  •  Differences in shares outstanding issue 1.58B v 3.45B


Epat multiple
EPAT Multiple

$173.68 > 117.88

Undervalued  Buy

Less: NFL = $43,917


Nea multiple
NEA Multiple

TM’s multiple= 2.60

$117.88 > 72.81

Overvalued  sell


R d multiple
R&D Multiple

TM’s multiple= 32.40

$117.88 > 50.70

Overvalued  sell


Advertising multiple
Advertising Multiple

  • TM’s multiple= 78.82

$117.88 > 0.92

Overvalued sell


Comparison to honda motor company
Comparison to Honda Motor Company

The following multiples are calculated using only Honda as a comparable entity due to IFRS:

$117.88 > 45.76

Overvalued  sell

$117.88 > 50.58

Overvalued  sell


Comparison to honda cont
Comparison to Honda Cont.

$117.88 > 47.20

Overvalued  sell

$117.88 > 46.29

Overvalued  sell


Combining estimates of equity value per share
Combining Estimates of Equity Value per Share

< $117.88

Overvalued sell


Issues and takeaways
Issues and Takeaways

  • Discrepancy with shares outstanding between financial statements/Tokyo Stock Exchange & Yahoo Finance

    • 3.45B v 1.58B

  • Not confident in the multiples method

  • Multiples are inconsistent

  • Wide range of Equity values

  • Companies don’t appear very

    comparable



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