Nissan Shares Slip Despite Cost-Cutting Plans, Analysts Maintain Moderate Sell Rating

Nissan shares fell 1.5% as CEO Ivan Espinosa plans to cut 11,000 jobs and shut down 7 manufacturing plants due to a 3% drop in sales volumes. Despite optimism and a focus on cost-cutting, analysts have a Moderate Sell consensus rating on NSANY stock.

Nissan Motor Co. shares fell 1.5% today following the announcement by CEO Ivan Espinosa of a significant restructuring plan. The plan includes cutting 11,000 jobs and shutting down seven manufacturing plants to address a 3% drop in sales volumes [1]. Despite Espinosa's optimism and the focus on cost-cutting, analysts have a Moderate Sell consensus rating on NSANY stock [2].

Espinosa, who took the helm in April, emphasized that the company's immediate priority is internal repair, stating, "In the short term, the focus that we have is to fix ourselves" [3]. The automaker has been grappling with declining sales, the transition to electric vehicles, and stiff global competition, particularly from Chinese rivals. These challenges have been exacerbated by U.S. President Donald Trump's 50% global tariffs on steel and aluminum [3].

Under its new Re:Nissan transformation plan, Nissan aims to reduce both fixed and variable costs. The company expects a 3% drop in sales volume during the current fiscal year, with the restructuring efforts set to continue through FY2027. Nissan also plans to sell part of its 15% stake in Renault and its entire shareholding in battery manufacturer AESC Group this year [2].

Nissan has suspended merit-based wage increases worldwide and is offering buyouts to selected US workers as part of its broader cost-cutting plan. The company is also looking to raise up to JPY 1 trillion (US$7 billion) this year through the issuance of new corporate bonds and by selling assets [2].

Despite the challenges, Espinosa remains optimistic about the restructuring plan, stating, "We are convinced that the plan is enough and robust" [3]. Analysts, however, are cautious, with a Moderate Sell consensus rating reflecting the uncertainty surrounding the company's turnaround efforts and the impact of external factors such as tariffs.

References:

[1] https://www.cbtnews.com/nissan-ceo-vows-to-fix-automaker-as-sales-slide-and-tariff-pressure-mounts/
[2] https://finance.yahoo.com/news/nissan-raise-jpy-1-trillion-091222006.html
[3] https://www.nbcbayarea.com/news/business/money-report/nissan-ceo-says-short-term-focus-is-to-fix-the-company/3884018/