Toyota launches $826 million stock buyback amid business disruptions

Toyota Motor Corp. stated Wednesday it’ll provoke a 100 billion yen ($826 million) stock buyback delivering on a promise to flexibly repurchase shares and pay out steady dividends to shareholders.

With Toyota shares buying and selling greater than 10 p.c off latest highs, the Japanese automaker stated it was taking the present stock worth into consideration and being “more flexible” than ever in its implementation of buybacks, in response to a press release to the Tokyo Stock Exchange.

The buyback announcement comes because the top-selling automaker’s shares have taken a success in latest months because it faces a windfall of disruptions.

Toyota’s factories have been halted not too long ago because of a cyberattack on one among its suppliers, a strong earthquake in Japan and a Covid outbreak within the Chinese metropolis of Changchun. Toyota’s shares closed in Tokyo on Wednesday virtually 12 p.c off a document shut in January.

Toyota’s determination got here at “bargain timing” given present stock costs, stated Bloomberg Intelligence analyst Tatsuo Yoshida. While the scale of the buyback could also be small relative to the company’s market capitalization, it’s a “positive” for Toyota’s shares, and an indication that the company is “steadily doing what it says it’ll do” when it comes to flexibly buying shares and paying regular dividends, Yoshida stated.

Buybacks have been on buyers’ minds this week in Asia, after shares in Alibaba Group Holding Ltd. surged following its announcement of an expanded $25 billion repurchase. Investors are betting that Tencent Holdings Ltd. may very well be subsequent to leap on the bandwagon.

Toyota will repurchase the shares from Thursday by May 10, across the time the carmaker usually declares full-year earnings.

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