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On Sep 3, 2013, Zacks Investment Research upgraded Nissan Motor Co. Ltd. (NSANY) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Nissan generated positive earnings surprises in 2 out of the last 3 quarters. Although the company’s profits dipped in the first quarter of fiscal 2013 (ended Jun 30, 2013), revenues in the quarter grew 2.6% to ¥2.14 trillion ($26.64 billion).

Unit sales of Nissan increased 14.6% to 1.21 million vehicles globally. Net sales grew 12.4% to ¥1.1 trillion ($13.80 billion) in Japan, 7.2% to ¥754.9 billion ($9.4 billion) in North America and 6.1% to ¥518.8 billion ($6.5 billion) in Asia. However, revenues in Europe declined 12.8% to ¥371.5 billion ($4.6 billion) during the quarter.

Meanwhile, the product revamping strategy of Nissan is yielding strong results, making 2013 the best year so far for the automaker. Strong demand for Altima, Sentra, Pathfinder, Versa and Rogue led to sales of 733,000 cars in the U.S. from Jan to Jul 2013. The sales in August have been impressive as well. Nissan also reported a massive 335% increase in sales of its hatchback electric car LEAF in the U.S. since the launch of the 2013 model in Mar 2013.

Moreover, Nissan will invest $5 billion in new plants in Mexico and Brazil and increase its manufacturing capacity in the U.S. plants. The company is aiming to take its production capacity in the Americas past 2 million units in 2014.

Nissan is also expanding its footprint in Brazil with a $1.5 billion manufacturing facility in Resende. This plant will likely produce 200,000 V Platform vehicles annually once the production starts in the first half of 2014. Moreover, the automaker will be producing 4-cylinder gasoline engines for Infiniti and Mercedes-Benz models at its Renault-Nissan Alliance powertrain plant in Decherd, Tenn. from early 2014. This is a joint venture with Daimler AG (DDAIF). The plant has a capacity of 250,000 units per year.

Nissan Motor is one of the largest automakers in the world. The company, along with its subsidiaries, engages in the production and sale of automotive products, industrial machinery and marine equipment, primarily in Japan, North America, and Europe. It manufactures passenger cars, trucks, buses, forklifts, light commercial vehicles, power trains and parts.

The Zacks Consensus Estimate for Nissan’s fiscal year 2013 (ending Mar 31, 2014), stands at $2.30 per share, up 34.5% year over year.

Other Stocks to Consider

Some other foreign automakers worth considering are Fuji Heavy Industries Ltd. (FUJHY) and Volkswagen AG (VLKAY). While Fuji carries a Zacks Rank #1 (Strong Buy), Volkswagen carries a Zacks Rank #2 (Buy).

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