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Nissan (NSANY) to Issue Recall on Improper Vehicles Scrutiny

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Nissan Motor CompanyNSANY will recall 150,000 vehicles in Japan due to improper inspections of brakes and steering, per Reuters. Prior to shipping, inspections of the vehicles were done at its two production plants in Japan. This recall, anticipated to be issued this week, will be the fourth one for the company over the past 14 months.

Nissan reported that it found numerous non-conformities that probably misjudged the vehicles' scrutiny. Brakes, steering wheels, speed measurements and stability of the vehicles could have missed a proper inspection due to non-conformities.

Over the past year, Nissan has been troubled by this type of recall. In July, the company admitted that the final inspections of its emissions and fuel economy samples did not match Japan's domestic standards.

Nissan Motor Co. Price and Consensus

Nissan Motor Co. Price and Consensus | Nissan Motor Co. Quote

On a similar note, the company recalled more than $1.2 million vehicles in October 2017. The recalled cars that were inspected by unauthorized technicians did not meet Japan's criteria for final inspections.

Nissan is already been facing difficulties after internal investigations found its ex-chairman guilty of using the company's capitals for personal use. Results of the investigation led to the arrest of the ex-chairman on Nov 19.

In the second quarter of fiscal 2018 (ended Sep 30, 2018), the company's net sales were ¥2.82 billion ($2.53 billion), which missed the Zacks Consensus Estimate of $2.56 billion. However, its earnings were 63 cents per ADR, which surpassed the Zacks Consensus Estimate of 48 cents. Additionally, for fiscal 2018 (ending on Mar 31, 2019), Nissan expects to witness year-over-year rise of 0.4% to ¥12 trillion in sales while operating income is anticipated to decline 6% to ¥540 billion.

Over the past seven days, the Zacks Consensus Estimate for Nissan's third-quarter and fiscal 2018 earnings have moved down 7% and 0.4%, respectively. Further, over the past month, its stock has lost 4.6%, underperforming 1% decrease recorded by the industry it belongs to.

Zacks Rank & Stocks to Consider

Nissan currently carries a Zacks Rank #4 (Sell). A few better-ranked stocks in the auto space are CarGurus, Inc. CARG , Cooper Tire & Rubber Company CTB , and General Motors Company GM , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

CarGurus has an expected long-term growth rate of 5%. Shares of the company have increased 2.3% over the past six months.

Cooper Tire has an expected long-term growth rate of 4%. Shares of the company have rallied 14.9% over the past six months.

General Motors has an expected long-term growth rate of 8.5%. Over the past three months, shares of the company have gained 2.7%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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