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AUTOMOTIVE: Nissan (NSANY Baa3/BB+/BBB-): Fitch Outlook Negative

AUTOMOTIVE
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Elevated risk of an eventual downgrade here. Spreads are already firmly in double-B territory.

  • Following the shocker that was recent results, we expected Moody’s to move to outlook negative, at least. Fitch also rates it IG and has moved first. Overnight reports of production cuts are an incremental negative. Tariffs were flagged as potential ratings driver, with the overnight news affecting it.
  • The main negative rating driver is profitability. Fitch sees low single digit EBIT margins from 2026, with consensus estimates between 0-1%. It has a 2.5% rating sensitivity.
  • Fitch sounds bullish on the restructuring plan, citing a solid cost cutting record.
  • It assumes dividend suspension from FY26. Nissan suspended the interim dividend but hasn’t made public commitments beyond that.
  • Positive FCF is another rating driver that looks likely to be breached for a prolonged period. Leverage is not an issue right now, with net cash at automotive.
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Elevated risk of an eventual downgrade here. Spreads are already firmly in double-B territory.

  • Following the shocker that was recent results, we expected Moody’s to move to outlook negative, at least. Fitch also rates it IG and has moved first. Overnight reports of production cuts are an incremental negative. Tariffs were flagged as potential ratings driver, with the overnight news affecting it.
  • The main negative rating driver is profitability. Fitch sees low single digit EBIT margins from 2026, with consensus estimates between 0-1%. It has a 2.5% rating sensitivity.
  • Fitch sounds bullish on the restructuring plan, citing a solid cost cutting record.
  • It assumes dividend suspension from FY26. Nissan suspended the interim dividend but hasn’t made public commitments beyond that.
  • Positive FCF is another rating driver that looks likely to be breached for a prolonged period. Leverage is not an issue right now, with net cash at automotive.