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Fundamental View
AS OF 11 Mar 2026Nissan trimmed FY25 guidance for Japan and Europe while maintaining North America forecasts and raising China projections. Operating profit outlook increased on stronger Re: Nissan cost savings and favorable currency revisions. Despite near-term automotive losses and negative F1H26 free cash flow, management targets sustainable automotive profit by FY27, supported by increased NEV mix in China and US hybrid launches.
Nissan’s bonds outperformed HY and BB indices by 18bp and 13bp respectively. Trading 30bp wide to BB but 70bp tight to HY, spreads could tighten towards BB on sustained momentum. We upgrade to Outperform on solid Re: Nissan execution, US reshoring, and improving fundamentals.
Business Description
AS OF 11 Mar 2026- Nissan, with headquarters in Yokohama, Japan, is a leading global automotive manufacturer with a market presence in many countries around the globe. The company’s growth investments are focused primarily on Japan, North America, and China, core markets with large profit pools in which Nissan has a meaningful market share. The company’s business in China is conducted through a joint venture with Dongfeng Motor Corporation.
- Nissan’s Sales Financing segment supports the sale of its vehicles by providing financing solutions to its customers and dealers. To enhance their creditworthiness, Nissan maintains keepwell (support) agreements with its wholly owned financial subsidiaries including Nissan Motor Acceptance Corporation (NMAC) in the United States and Nissan Financial Services (NFS) in Japan.
- The Renault-Nissan-Mitsubishi Alliance was established in 1999 to enhance member company scale in product development and raw material purchasing. The alliance includes equity participation, which led to Nissan holding ownership stakes in Renault (15% non-voting) and Mitsubishi (34%) and Renault holding an ownership stake in Nissan (43%). The Alliance’s automobile production volume is the third largest globally behind Toyota and Volkswagen.
Risk & Catalysts
AS OF 11 Mar 2026Management lowered FY25 retail sales and production volume outlooks by 1.5% and 3.0% due to weaker than expected performance in Japan and Europe, but maintained its North America forecast and raised its China forecast—its two biggest profit drivers.
Management initiated FY26 net loss guidance at ¥650 bn, predominantly from non-cash accounting changes, owing to the evolving tariff environment. Management expects positive automotive free cash flow in F4Q25 and F2H25, although full-year automotive free cash flow is expected negative.
Management raised its FY25 operating loss forecast from ¥(275) bn to ¥(60) bn driven by cost reduction actions and manufacturing efficiencies (¥105 bn improvement in Monozukuri initiatives), partially offset by weaker sales performance (-¥50 bn) and currency headwinds (¥80 bn).
Key Metric
AS OF 11 Mar 2026| JPY bn | FY21 | FY22 | FY23 | FY24 | LTM F3Q25 |
|---|---|---|---|---|---|
| Revenue | 7,393 | 9,573 | 11,524 | 11,371 | 10,776 |
| EBIT | (78) | 218 | 394 | (78) | (360) |
| EBIT Margin | (1%) | 2% | 3% | (1%) | (4%) |
| EBITDA | 211 | 535 | 745 | 286 | (77) |
| EBITDA Margin | 2.9% | 5.6% | 6.5% | 2.5% | (1.6%) |
| Total Liquidity | 3,601 | 3,658 | 4,196 | 4,272 | 2,749 |
| Net Debt | (728) | (1,213) | (1,546) | (1,498) | (959) |
| Total Debt | 973 | 687 | 468 | 661 | 1,191 |
| Gross Leverage | n/m | 1.3x | 0.6x | 2.3x | n/a |
| Net Leverage | -3.4x | -2.3x | -2.1x | -5.2x | 12.5x |
CreditSight View Comment
AS OF 11 Mar 2026We upgrade our recommendation on Nissan Motor and Nissan Motor Acceptance Co. notes from Market perform to Outperform based on relative value, the company’s weak but improving near-term automotive profit and free cash flow outlook, solid Re: Nissan cost savings execution, and improved retail sales trends in the US and China.
Recommendation Reviewed: March 11, 2026
Recommendation Changed: February 13, 2026
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