Stock Market

TM Stock Alert: What to Know as Toyota CEO Steps Down

It looks like financial traders are still deciding what to do with Toyota Motor (NYSE:TM) stock today. They’re mulling over an announcement that Toyota’s chief executive, Akio Toyoda, is stepping down. The billion-dollar question is about how this might change Toyota as a company going forward.

Toyoda is the grandson of Toyota’s founder, and he’s not leaving the company entirely. He’ll stay on as Toyota’s chairman. The president of Toyota’s Lexus brand, Koji Sato, will take over Toyota’s CEO role on April 1.

Some people may have criticized Toyota, and therefore Toyoda, for pushing hybrid technology with its Prius brand, instead of committing fully to electric vehicles (EVs) like many other automakers have done. For example, Anders Schelde, chief investment officer of AkademikerPension, warned, “[T]he whole auto sector needs to make disruptive change and Toyota has been lagging in this in our view.”

What’s Happening With TM Stock?

So, how is Wall Street reacting to Toyota’s upcoming C-suite change-up? The initial response is muted but slightly negative, with TM stock sliding less than 1% this morning.

Perhaps investors are still weighing the implications of Sato replacing Toyoda. There might be a positive, transformative impact in the long run. As Schelde put it, “[T]his could be chance for a fresh start” for Toyota.

On the other hand, there’s no guarantee that installing Sato at the helm will bring major changes for Toyota. “We are hopeful this could help Toyota to set a new direction, but it remains to be seen,” Schelde warned.

Seiji Sugiura, an analyst with Tokai Tokyo Research Institute, doesn’t seem particularly optimistic about this. “Probably, the day-to-day management will not change . . . [I]t may be hard for the young, new president to really show his hand,” Sugiura explained.

Today’s investors aren’t especially optimistic, either. They’re pushing TM stock slightly lower now as they may be skeptical about Toyota and its next chief executive.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.