Toyota Motor ADRs sink after outlook cut

NEW YORK - U.S.-traded shares of Toyota Motor Corp. tumbled on Thursday after the Japanese automaker slashed its full-year forecast and posted a steep drop in quarterly profit.

American Depositary Receipts of Toyota lost $13.28, or 16.5 percent, to close at $67.09.

The No. 1 Japanese automaker said Thursday it expects its fiscal 2009 profit to be less than a third of last year's, reflecting the shrinking U.S. vehicle market and a stronger yen.

It also reported its earnings for the July-September quarter plunged 69 percent to 139.8 billion yen ($1.4 billion).

Standard & Poor's equity analyst Efraim Levy downgraded Toyota ADRs to "Sell" from "Hold" in a note to investors Thursday. He also cut his price target to $55 from $100, implying he expects the stock to lose 32 percent from its Wednesday close of $80.37.

"We see (Toyota) as a long-term leader with balance sheet strength and a secure dividend; but with near-term pressure, our opinion is sell," Levy wrote.

Toyota has held up in the tough vehicle market better than its competitors in Detroit, helped in large part by its lineup of fuel-efficient vehicles. But it has recently been hobbled by the worldwide credit crunch, which has made vehicle purchases more difficult.

ADRs of Toyota are down 24 percent since the start of the year.

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