Toyota Motor
(TM:
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paced the alterna-fuel revolution in 1997 with the introduction of its Prius hybrid. Now, for the third-generation model, the Japanese firm is planning to take its famous fuel-sipper over to the solar side. Kyocera will supply solar panels for the new Prius model, according to a source cited by Reuters, which will power part of the air-conditioning unit on higher-end versions of the hybrid vehicle. So far, Toyota has declined to comment on the speculation.
The addition of solar panels to the already green-friendly Prius is sure to thrill eco-conscious consumers, but some question the practicality of the move. Kentaro Endo of Japan's Ministry of Economy, Trade and Industry said, "Even if you laid solar panels out on the entire roof of a
house, you only generate enough energy to run two hair dryers." The Reuters source seems to agree, calling the addition of the panels "more of a symbolic gesture."
Nevertheless, Toyota shares have tacked on 1.7% in early trading. Today's gains aside, it's been a slippery slope for the automaker since January 2007; the shares are down 33% since topping out at the 138 level.
Considering this long-term downtrend, expectations are still running pretty high on Wall Street. Thomson Financial notes that the average 12-month price target on TM is $125.89, a premium of 37% to the stock's closing price last Thursday. This leaves Toyota vulnerable to price-target cuts and possible downgrades if weakness in the shares persists. And, as automakers continue to struggle against high steel costs, a slowdown in consumer spending, rising fuel costs, and the credit crunch, it might take more than a symbolic solar gesture to stem the bleeding in Toyota shares.
Copyright Schaeffer's Investment Research http://www.schaeffersresearch.com