Nissan shares jump 7 percent after restructuring steps

Nissan, owned 44 percent by Renault SA , said after the market closed on Monday that it expected an operating loss of 180 billion yen ($1.97 billion) in the year to March 31 and a net loss of 265 billion yen to pay for a series of steps to weather the worst downturn in the global car market in decades.

The stock ended the morning up 7.3 percent at 280 yen, bucking a fall in many other Japanese auto stocks. Nissan shares lost nearly 6 percent on Monday.

Analysts mostly welcomed Nissan's moves, including its plan to knock vehicle inventory down by 20 percent by next month and reduce headcount by about 9 percent through the next business year to match tumbling global car sales.

Still, despite the low valuations -- Nissan has an estimated price-to-book ratio of 0.3 times -- analysts remained hesitant about recommending the stock.

"We think it will be hard for Nissan to turn an operating profit (next business year), assuming a 10 percent fall in total demand and a dollar rate of 90 yen," Goldman Sachs analyst Kota Yuzawa wrote in a note to clients.

He kept his "sell" rating on Nissan, also citing low visibility on free cash flow generation, including at Nissan's affiliated parts makers.

NikkoCitigroup analyst Noriyuki Matsushima said that despite the new measures that aim to swiftly limit the damage caused by declining global demand and the strong yen, there was little reason to buy the shares.

"Given the outlook for two consecutive years of losses, (and) although the shares have dropped to around our 260 yen target price, we still feel it is too early to invest," he wrote in a report.

Nissan's shares have lost more than 70 percent in the past 12 months, making them the worst performer among Japanese carmakers. The transport sector subindex lost 47 percent in the same period.

($1=91.48 Yen)

(Reporting by Chang-Ran Kim; Editing by Chris Gallagher)