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Nissan Considers Stake Reduction in Renault to Fund New Investments
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Key Takeaways
NSANY is considering a stake reduction in Renault to support new product development.
The companies' updated alliance allows mutual stakes to drop from 15% to 10% for flexibility.
NSANY plans to raise 1 trillion yen via bonds and asset sales to fund restructuring and debt payments.
Nissan Motor Co., Ltd. (NSANY - Free Report) plans to reduce its ownership stake in its long-standing French partner Renault SA (RNLSY - Free Report) to allocate more resources toward the development of new vehicles. Per Nikkei, Nissan’s partnership with Renault would remain strong, even as they lessen their financial and governance ties.
The two automakers, partners for more than 20 years, have updated their alliance agreement, which allows them to decrease their mutual shareholdings from 15% to 10% to grant each company greater operational flexibility. Per the agreement, any stake sale must be coordinated with the other party and include a right of first refusal. Per Reuters, if Nissan sells a 5% stake in Renault, it could raise around ¥100 billion at the current market value. Nissan currently holds a 15% share in Renault, based on LSEG data.
Renault, on the other hand, has been gradually reducing its stake in Nissan, held in a French trust, since 2023, following a restructuring of their alliance to ensure a more balanced equity relationship. Per Nissan, if it proceeds with a share sale, the capital raised would primarily support new product development. However, no final decision has been made yet.
Since taking over as CEO in April, Ivan Espinosa has introduced a strategic plan titled “Re:Nissan,” which outlines a goal to cut 20,000 jobs and reduce the company’s global assembly plants from 17 to 10 by March 2028. This restructuring comes in the wake of a net loss of ¥670.8 billion for the fiscal year ending March 2025.
Nissan is also planning to raise up to ¥1 trillion through a mix of corporate bond issuance and asset sales to meet upcoming bond repayments and cover restructuring costs.
The Zacks Consensus Estimate for CARG’s 2025 sales and earnings implies year-over-year growth of 4.96% and 25%, respectively. EPS estimates for 2025 and 2026 have improved 30 cents and 44 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for MGDDY’s 2025 sales and earnings implies year-over-year growth of 1.69% and 37.76%, respectively. EPS estimates for 2025 have improved by a penny in the past 30 days. EPS estimates for 2026 have improved by 3 cents in the past seven days.
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Nissan Considers Stake Reduction in Renault to Fund New Investments
Key Takeaways
Nissan Motor Co., Ltd. (NSANY - Free Report) plans to reduce its ownership stake in its long-standing French partner Renault SA (RNLSY - Free Report) to allocate more resources toward the development of new vehicles. Per Nikkei, Nissan’s partnership with Renault would remain strong, even as they lessen their financial and governance ties.
The two automakers, partners for more than 20 years, have updated their alliance agreement, which allows them to decrease their mutual shareholdings from 15% to 10% to grant each company greater operational flexibility. Per the agreement, any stake sale must be coordinated with the other party and include a right of first refusal. Per Reuters, if Nissan sells a 5% stake in Renault, it could raise around ¥100 billion at the current market value. Nissan currently holds a 15% share in Renault, based on LSEG data.
Renault, on the other hand, has been gradually reducing its stake in Nissan, held in a French trust, since 2023, following a restructuring of their alliance to ensure a more balanced equity relationship. Per Nissan, if it proceeds with a share sale, the capital raised would primarily support new product development. However, no final decision has been made yet.
Since taking over as CEO in April, Ivan Espinosa has introduced a strategic plan titled “Re:Nissan,” which outlines a goal to cut 20,000 jobs and reduce the company’s global assembly plants from 17 to 10 by March 2028. This restructuring comes in the wake of a net loss of ¥670.8 billion for the fiscal year ending March 2025.
Nissan is also planning to raise up to ¥1 trillion through a mix of corporate bond issuance and asset sales to meet upcoming bond repayments and cover restructuring costs.
NSANY’s Zacks Rank & Key Picks
Nissan carries a Zacks Rank #3 (Hold) at present.
Some better-ranked stocks in the auto space are CarGurus, Inc. (CARG - Free Report) and Michelin (MGDDY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CARG’s 2025 sales and earnings implies year-over-year growth of 4.96% and 25%, respectively. EPS estimates for 2025 and 2026 have improved 30 cents and 44 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for MGDDY’s 2025 sales and earnings implies year-over-year growth of 1.69% and 37.76%, respectively. EPS estimates for 2025 have improved by a penny in the past 30 days. EPS estimates for 2026 have improved by 3 cents in the past seven days.