Nissan Earnings: Turnaround Progress Demonstrated with Increased Revenue Despite Down Volume

No-moat-rated Nissan reported fiscal fourth-quarter 2022 (ended March 31, 2023) earnings per share of JPY 27.28, trouncing the JPY 10.47 FactSet consensus by JPY 16.81, and JPY 23.66 better than the JPY 3.62 reported a year ago when the chip crisis was at a peak. While automotive revenue soared 41% to JPY 2.84 trillion, consolidated volume was 13% higher and average revenue per unit jumped 21%. Pricing, mix, and favorable currency were partially offset by the chip shortage and COVID-19 resurgence in China. We raised our fair value estimate to JPY 1,490 from JPY 1,450 as the time value of money added JPY 30, while changes to our model added JPY 10. The 5-star-rated Nissan shares currently trade at a 66% discount to our new fair value. For long-term investors with patience for a turnaround situation, we think the shares offer compelling value.