Nissan Earnings: Turnaround Continues as Revenue Increase Outpaces Volume and Margin Expands

No-moat-rated Nissan reported fiscal first-quarter 2022 (ended June 30, 2023) earnings per share of JPY 26.93, better than the JPY 20.52 FactSet consensus by JPY 6.41, and up JPY 14.89 from the JPY 12.04 reported a year ago as the chip shortage improved and turnaround progress continues. While automotive revenue soared 40% to JPY 2.63 trillion, consolidated volume was 20% higher and average revenue per unit jumped 13%. Pricing, mix, and favorable currency were partially offset by the chip shortage. The 5-star-rated Nissan shares currently trade at a 56% discount to our unchanged JPY 1,490 fair value estimate. For long-term investors with patience for a turnaround situation, we think the shares offer compelling value.