“We Have to…Fix Ourselves”: Nissan Stock (OTHEROTC:NSANY) Slips as it Plans Cost-Cutting

Normally, plans for huge cost-cutting measures are welcomed by shareholders. But sometimes, not even that is enough to budge shareholders back into interest. That is what happened at legacy automaker Nissan (NSANY), who saw shares slump over 1.5% in Thursday afternoon’s trading.

Nissan’s new CEO, Ivan Espinosa, already has a major plan in mind, and that starts with cost cuts. Espinosa noted that “…in the short term, the focus that we have is to fix ourselves.” But Espinosa also believes that the plan currently in place is “…enough and robust,” a sentiment that shareholders do not seem to share, considering how many of those shares they have sold off recently.

The plan as it sits involves the shutdown of seven manufacturing plants as well as 11,000 jobs, as Nissan braces for a 3% drop in its overall sales volumes for the fiscal year. But can that be enough? After all, this plan was made before the recent announcement of 50% tariffs on steel and aluminum, as well as a set of “reciprocal levies” set to start up with July’s arrival. But Espinosa appears to be sticking to the plan as originally set, focusing on ramping up “….our efforts on cost, both fixed cost (and) viable cost.” Which is, of course, an excellent plan, but it begs certain questions about how Nissan will increase sales to go along with those hefty cuts.

This is Fine

Espinosa has a plan beyond mere slash-and-burn, though, and this will likely be vital to ensuring the survivors of his massive cutback plan aren’t so demoralized that they become liabilities themselves. That plan: optimism. “Keep the optimism up,” Espinosa said in an interview with CNBC, “because the environment is very tough and you don’t want to get overwhelmed.”

Espinosa also pointed to the value of openness and collaboration, noting “We’re having more open discussions about what we can do together. The context is very unique—geopolitics, supply chain challenges—and sometimes, it’s just not possible to go it alone.” Considering how many people Espinosa is planning to fire, it becomes easy to wonder just who will remain at Nissan with which to collaborate in the first place.

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 assigned by Bernstein analyst Masahiro Akita, as indicated by the graphic below. Nissan has seen a 26.34% 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.

See more NSANY analyst ratings

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