Japanese automaker Nissan Motor Corporation Limited (Nissan), enjoyed a strong rebound in recent financial performance (six months to 30 September), marking a significant improvement from the prior year.
Nissan’s profitability has lagged that of its peers in recent years which the company is trying to address through its “Nissan NEXT” transformation plan. This was launched in 2020 to ensure steady and profitable growth through capitalizing on core competencies and reallocating resources to globally competitive models, rationalizing production, and cutting general and admin costs to achieve core operating margins over 5% this year.
Very recently, rating agencies have downgraded Nissan’s credit ranking. Yet, improving business conditions and a highly possible achievement of the turn-around could make Nissan Motor as the rising star candidate.
Given the conditional situation, investors are advised to be selective with any credit engagement. In particular, only a few longer-dated bonds offer an opportune risk/reward ratio to longer-term-oriented investors.