Morningstar | Nissan Cuts Guidance on Fiscal-Year 2018 Ended March 31, 2019; Maintaining JPY 1,480 FVE
No-moat rated Nissan announced a cut in its guidance for the 2018 fiscal year ending March 31, 2019. Versus the prior guidance, management's operating profit forecast has dropped 29% to JPY 318 billion, from JPY 450 billion, due primarily to a warranty extension on certain models equipped with continuously variable transmissions, but also due to weaker-than-expected operating leverage as global sales volumes were 1.5% lower than prior guidance. Management also blamed slightly weaker sales in Japan on the two major scandals the company currently faces--the Carlos Ghosn controversy and lack of controls at end of line vehicle inspection. We reduced our diluted earnings per share estimate to JPY 82.00 from JPY 111.50. Nissan is expected to report fiscal year-end results on May 14.The one-time, transient nature of management's cut in guidance has no impact on our normalized, sustainable midcycle assumptions for year-five of our Stage I forecast. Consequently, the reduction in our fiscal 2018 EPS estimate has only offset the time value of money increase since our last model update. The stock currently trades at a 39% discount to our JPY 1,480/$26 fair value estimates. We think the 4-star rated shares of Nissan represent attractive value for investors relative to our expectations for cash flow and returns on invested capital.
Renault is an automobile manufacturer. Co.'s activities have been organized into two main business sectors, in more than 120 countries: Automotive and Sales Financing. Co. designs, develops and sells passenger cars and light commercial vehicles. Following the acquisition of Romanian carmaker Dacia and Samsung Motors' operating assets in South Korea, Co. has three automotive brands: Renault, Dacia and Samsung. RCI Banque, Co.'s captive financing arm, finances sales of the Renault, Renault Samsung Motors (RSM) and Dacia brands, and, in Europe, the Nissan and Infiniti brands. In addition to these two activities, Co. has equity investments in the following two companies: Nissan and AVTOVAZ.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.