S&P Global Ratings has revised Nissan Motor's (OTC:NSANY) credit outlook to negative from stable, while affirming its BB+ rating, signaling concerns about the automaker's ability to recover its financial and operational performance.

Key Factors Behind the Revision

1. Profitability Concerns

   • S&P highlighted that Nissan's profitability remains under pressure, driven by higher sales incentives and elevated inventory levels in North America, its primary market.
   • Slowing car sales in North America have added to these challenges, delaying efforts to secure positive free cash flow.

2. Sales Incentives and Inventory Management

   • To address rising inventories, Nissan has increased sales incentives. While this could alleviate short-term issues, it raises questions about the company's longer-term profitability and pricing strategy.

3. Creditworthiness at Risk

   • S&P noted that Nissan's creditworthiness may deteriorate further unless it improves operational efficiencies and generates consistent free cash flow.

Market and Financial Trends

For more insights into Nissan's financial health and potential turnaround:

• Access Ratios (TTM) API to explore key profitability and liquidity metrics.

To understand how Nissan compares to peers in the auto industry:

• Check the Industry P/E Ratio API for valuation benchmarks.

Outlook

Nissan faces a critical period to stabilize its operations and address inventory challenges. The success of its efforts will significantly impact its credit rating trajectory and its ability to compete in an increasingly challenging automotive market.