Shares of Toyota Motor (NYSE: TM) were gaining today as investors continued to bet that the Japanese auto manufacturer would benefit from the ongoing strike by the United Auto Workers (UAW).
Though there was no company-specific news about Toyota, that was enough to boost the stock today, sending it up 3% as of 11:32 a.m. ET on Tuesday.
Toyota shares are continuing a recent rally as manufacturers that don't depend on union workers, like Toyota, are expected to benefit from the UAW strike against Ford, General Motors, and Stellantis, the owner of Chrysler.
A Canadian autoworkers union, Unifor, also joined the strike last night as its contract with Ford expired.
Though talks between the union and the automakers continued yesterday, the UAW is threatening to expand the strikes to new plants by the end of the week if the companies don't sweeten their proposals.
Currently, about 13,000 UAW members are on strike at three auto plants, but an expanding job action would seem to benefit manufacturers like Toyota even more so.
Toyota shares are up about 20% over the last month as the company reported August North America sales were up 14.8% to 194,708 vehicles, a sign that it's gaining market share.
The company also teamed up with FuelCell Energy earlier this month, completing the first so-called tri-gen production system, which produces renewable electricity, renewable hydrogen, and water from directed biogas, showing the company is making moves in renewable energy.
Toyota stock looks well priced at a price-to-earnings ratio of just 12, and even a resolution to the strike would seem to be good news for the company because its rival automakers will have to spend more money on labor, meaning they'll have to raise vehicle prices or eat the costs and spend less elsewhere.
Either way, Toyota looks like a winner from the strike.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends General Motors and Stellantis and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy.