CNH Tariff Pressures Will Moderate As Agricultural Cycle Recovery Emerges By 2026

Analysts have trimmed their price target on CNH Industrial by a few dollars to better reflect modestly softer long term revenue growth and margin expectations, as well as a slightly higher implied future earnings multiple in light of ongoing tariff headwinds and a slower anticipated recovery in the agricultural market.

Analyst Commentary

Recent Street research reflects a more cautious but still engaged stance from the sell side, with modestly lower price targets framed against ongoing operational execution and the pace of recovery in key end markets.

Bullish Takeaways

• Bullish analysts highlight that management has proactively reset near term expectations, which may de risk estimates and create a cleaner setup for upside if the agricultural cycle stabilizes sooner than anticipated.
• Expectations for a potential agricultural market inflection around 2026 support a longer term recovery narrative and underpin the view that current valuation already discounts much of the cyclical downturn.
• Some investors see the combination of lower price targets and maintained Neutral ratings as signaling that downside may be more limited from here, provided CNH can sustain cost discipline and protect margins.
• Improved earnings visibility beyond the near term, if supported by clearer demand signals and easing tariff pressures, could justify a higher earnings multiple than what is currently implied in the reset targets.

Bearish Takeaways

• Bearish analysts point to the Q3 earnings miss and reduced guidance as evidence that execution risk remains elevated and warrants lower price targets despite an already compressed valuation.
• Persistent tariff headwinds are seen as a structural drag on profitability, limiting near term margin expansion and constraining the upside case on earnings revisions.
• Heightened concern around Brazil and broader Latin American demand introduces additional uncertainty to CNH's growth trajectory, particularly in high margin agricultural equipment.
• The slower than previously expected recovery in the agricultural market reduces confidence in near term top line acceleration and leads to more conservative growth and multiple assumptions in valuation models.

What's in the News

• CNH and Cyient have renewed and expanded their strategic partnership to scale advanced perception and automation capabilities across multiple construction vehicle platforms. The initiative builds on their Advanced Perception System for Wheel Loaders showcased at Bauma, with a focus on autonomy, safety, and productivity gains. (Key Developments)
• CNH is launching its FLEETPRO aftermarket services line at Agritechnica 2025. The line offers certified spare parts and consumables aimed at post warranty and legacy agricultural machinery across EMEA, targeting dependable performance and competitive pricing through authorized Case IH, New Holland, and STEYR dealers. (Key Developments)
• The FLEETPRO portfolio will include Precision Farming kits, developed with CHC Navigation. These kits will feature 10 inch and 12 inch guidance displays with hydraulic and assisted steering options that are compatible with mixed brand fleets, and can be scaled with CNH's Raven precision technology and FieldOps digital platform integration. (Key Developments)
• CNH has completed a share repurchase tranche, buying back 4,444,234 shares from July 1 to September 30, 2025. This brings total repurchases under the February 14, 2024 buyback program to 18,638,409 shares, or 1.48 percent of shares outstanding, for $205.34 million. (Key Developments)

Valuation Changes

• Fair Value Estimate was nudged slightly lower, moving from $13.12 to $13.10 per share, reflecting marginally softer long term assumptions.
• The Discount Rate was effectively unchanged, holding at approximately 13.46 percent and indicating a stable risk profile in the updated model.
• Revenue Growth was reduced modestly, with the long term annual growth assumption easing from about 1.52 percent to 1.46 percent.
• The Net Profit Margin was trimmed slightly, shifting from roughly 8.16 percent to 8.15 percent in the updated forecast period.
• The Future P/E was raised marginally, increasing from about 15.63x to 15.66x and implying a slightly higher valuation multiple on forward earnings.