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CNH Industrial NV CNHI

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

CNH Industrial Set to Recover in 2021 as End Markets Strengthen, but We Think Shares Are Overvalued

Dawit Woldemariam Equity Analyst

Analyst Note

| Dawit Woldemariam |

After taking a fresh look at our thesis on CNH Industrial, we’ve increased our fair value estimate to $12.90 from $10.30, reflecting our more optimistic agriculture demand outlook. Crop prices have risen significantly, nearing highs seen at the beginning of the last decade, when a drought in the U.S. constrained global supplies. Today, crop prices are higher due to strong demand from China, in addition to tight capacity. We believe this will cause demand for agriculture equipment to increase in the near term, benefitting CNH. When crop prices rise, profitability for farmers improves, giving them the ability to refresh their machine fleet.

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Company Profile

Business Description

CNH Industrial is a global manufacturer of heavy machinery, with a range of products including agricultural and construction equipment, commercial vehicles, and powertrain components. One of its most recognizable brands, Case IH, has served farmers for generations. Its products are available through a robust dealer network, which includes over 3,600 dealer and distribution locations globally. CNH Industrial’s finance arm provides retail financing for equipment and vehicles to its customers, in addition to wholesale financing for dealers; which increases the likelihood of product sales.

Contact
25 St. James's Street
London, SW1A 1HA, Netherlands
T +44 2077660346
Sector Industrials
Industry Farm & Heavy Construction Machinery
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 64,016

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