It has not been, strictly speaking, a good year so far for automaker Nissan (NSANY). And today brought plenty more bad news. Some serious supply chain issues are firing up in the background, and just to put the poisoned cherry on this already noxious sundae, a major recall notice emerged. But investors took it all in stride, and gave Nissan shares a fractional boost in Wednesday afternoon’s trading.
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Give Nissan its due credit; things may be bad therein, but it is trying, almost frantically, to turn things around. Reports note that Nissan has already started job cuts, planning to take 20,000 jobs out of the equation going forward. That proved to be decimation and then some; about 15% of the global workforce is poised to be turned out.
But the situation got, perhaps, more dire from there. Nissan is also looking to its suppliers to save a few bucks and buy it some breathing room. Nissan is actively asking suppliers to wait for their payments, which would free up some cash and spread out the payments a bit more. Reports note that Nissan suppliers are offered the choice to “…be paid immediately or opt for a later payment.” Apparently, Nissan has “incentivized” some European suppliers to take more flexible payment terms at no extra cost. Reports suggest that Nissan offered the suppliers willing to wait a higher interest rate on their payments.
Then The Recall Hit
If that sounds like a problem solved by the skin of Nissan’s strictly metaphorical teeth, the next problem is much more pronounced. Nissan, reports note, will be recalling 443,899 vehicles in the United States over—and brace yourself for this—an engine failure.
Several models of Nissan are involved, including the Altima, the Infiniti QX50, the Infiniti QX55, and the Rogue. Reports note that the vehicles’ engine bearings may have “manufacturing defects” which can result in a loss of power, and naturally, increase the risk of a crash. Those impacted by the recall will return vehicles to dealerships, where the oil pan will be inspected for metal debris. If debris is found, the engine will be repaired or replaced outright at no charge. A separate procedure will be followed for vehicles with three-cylinder 1.5-liter VC-Turbo engines.
Is Nissan Stock a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on NSANY stock based on one Sell assigned in the past three months by Bernstein analyst Masahiro Akita, as indicated by the graphic below. Nissan has seen a 30.82% loss in its share price over the past year, but Akita has no price target on NSANY stock, so there is no average price target to consider.
