Advanced Connectivity And Emerging Markets Will Open Future Horizons

Key Takeaways

• Expansion of advanced tech and services, along with focus on sustainability, will drive higher-margin growth and position CNH for industry shifts toward autonomy and electrification.
  
• Strategic moves in emerging markets and operational improvements will diversify revenue sources, boost efficiency, and support earnings growth as demand recovers.
  
• Persistent cost pressures, geographic concentration, inventory challenges, execution risks in digital transformation, and cyclical market exposure threaten margin stability and long-term growth.

Catalysts

An equipment and services company, engages in the design, production, marketing, sale, and financing of agricultural and construction equipment in North America, Europe, the Middle East, Africa, South America, and the Asia Pacific.

• The integration of advanced connectivity and precision technologies (e.g., the Starlink partnership, FieldOps platform, in-house tech stack) positions CNH to capture greater recurring, higher-margin revenue streams from software, data, and tech-enabled services, supporting net margin and long-term earnings growth.
  
• Continued strategic investment and momentum in emerging markets such as India, Eastern Europe, Latin America, and Africa will diversify revenue streams, reduce geographic dependence on North America, and drive top-line revenue growth as mechanization rates rise and local engineering/sourcing are leveraged.
  
• Ongoing product portfolio refreshes and launches-especially in mid-range and high-value tractors and tech-enhanced machinery-alongside disciplined channel inventory management, set up CNH for sharp revenue and earnings momentum as demand recovers from trough levels in 2026.
  
• The global push for sustainable, energy-efficient, and connected equipment is driving increased R&D and new product introductions at CNH, positioning the company to benefit from the accelerating industry shift toward autonomy, electrification, and environmental compliance, supporting future sales and improved margins.
  
• Persistent operational focus on manufacturing quality, process improvements, and cost discipline, complemented by strategic sourcing initiatives (with particular progress in Europe), will underpin higher operating leverage, net margins, and earnings as production levels normalize and the company enters the next upcycle.

CNH Industrial Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming CNH Industrial's revenue will grow by 1.1% annually over the next 3 years.
• Analysts assume that profit margins will increase from 4.6% today to 8.3% in 3 years time.
• Analysts expect earnings to reach $1.5 billion (and earnings per share of $1.26) by about August 2028, up from $823.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $2.1 billion in earnings, and the most bearish expecting $1.0 billion.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 17.7x on those 2028 earnings, down from 18.9x today. This future PE is lower than the current PE for the US Machinery industry at 23.4x.
• Analysts expect the number of shares outstanding to decline by 0.24% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 13.28%, as per the Simply Wall St company report.

CNH Industrial Future Earnings Per Share Growth

Risks

• Ongoing uncertainties around tariffs, retaliatory trade agreements, and escalating input costs (notably steel, copper, and semiconductors) may persistently impact CNH's cost structure and pricing power, posing a risk of further margin compression and putting pressure on earnings.
  
• Heavy reliance on the North American agricultural market, which is experiencing disproportionately large sales declines (36% drop in Q2 2025), exposes CNH to significant geographic risk and earnings volatility, especially given mixed prospects for swift market recovery and the slow wait-and-see approach from farmers.
  
• Rising inventories (especially small and medium tractors in North America) and ongoing channel destocking create a risk of discounting, price incentives, and reduced pricing discipline, potentially leading to revenue and net margin erosion if used equipment oversupply persists.
  
• Execution risk around digital transformation and tech stack integration-including significant investments in tech/precision offerings-could result in elevated R&D and capex without a proportional uplift in competitive positioning, especially as established industry peers and technology startups intensify innovation and vie for market share, impacting long-term earnings growth.
  
• Exposure to cyclicality and macroeconomic uncertainty in key end markets (agriculture and construction), combined with soft commodity prices and high farmer stock levels, may cap equipment replacement cycles and industry demand, ultimately limiting top-line growth and compressing net margins for an extended period.

Valuation

• The analysts have a consensus price target of $15.216 for CNH Industrial based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $21.0, and the most bearish reporting a price target of just $11.5.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $18.7 billion, earnings will come to $1.5 billion, and it would be trading on a PE ratio of 17.7x, assuming you use a discount rate of 13.3%.
  
• Given the current share price of $12.42, the analyst price target of $15.22 is 18.4% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.