Credit Suisse Sees ~30% Upside Potential In CNH Industrial Impressed By Reasonable Financial Targets & Simple Portfolio

  • Credit Suisse analyst Jamie Cook initiated coverage on CNH Industrial NV CNHI with an Outperform rating with a price target of $21.
  • Under the leadership of Chief Executive Officer Scott Wine, CNH Industrial has taken a number of strong actions to simplify the portfolio, the analyst said.
  • In January 2022, CNHI demerged from the commercial vehicle business, Iveco, and is now a pure-play farm and construction equipment company, the analyst added.
  • Also ReadCredit Suisse Thinks Strength Across Segments Positions Deere In Spotlight
  • CNH acquired Raven to bolster its Precision AG capabilities and Sampierana to round out its construction offering. 
  • The analyst sees more transformative portfolio actions largely complete, with the new CNHI simplified and refocusing its efforts on the customer. 
  • Organic investment is focused on new products and technology, enabling the company to remain a leading manufacturer and gain share in select markets, the analyst added.
  • By 2024, CNH targets Industrial Activities net sales of $20 billion – 22 billion, representing a ~6% CAGR, and adjusted EBIT margins of 12-13%. 
  • CNH Industrial expects to gain market share by more than 200 basis points over the three-year planning period (2022-24), driven by new product launches, and assumes minimal volume growth from the Farm Equipment market.
  • The analyst believes the company’s targets are reasonable and have potential upside.
  • While macro concerns continue to weigh on the broader industrial group, the analyst expects farm equipment names to be more resilient in a recession.
  • Also SeeCathie Wood's ARK Invest Sells Shares In 2 Manufacturers With Increasing Dividends
  • Price Action: CNHI shares are trading higher by 1.61% at $16.09 on the last check Tuesday.
  • Photo Via Company
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