CNH Industrial (NYSE:CNH) Valuation in Focus After Earnings Drop and Sector Weakness Outlook

CNH Industrial (NYSE:CNH) reported a sharp drop in third quarter net income, along with cautious guidance for 2025. Management expects net sales across its agriculture and construction segments to decline over the coming year.

See our latest analysis for CNH Industrial.

Despite some impressive moves toward automation in its construction equipment division and recent debt offerings, investors have taken a cautious view on CNH Industrial. After a year of pressure from falling agricultural demand and analyst downgrades, the company has posted a 1-year total shareholder return of -22.3%. Momentum appears to be fading compared to previous years.

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The company’s shares have been under pressure. The stock now trades at a notable discount to analyst price targets. Is this the opportunity value-focused investors have been waiting for, or is the market already factoring in the tough road ahead?

Most Popular Narrative: 28.1% Undervalued

With a fair value estimate of $13.12 versus the last close at $9.43, the current market price leaves unusual room relative to analyst growth assumptions. Here is what is fueling this gap, according to the most widely followed narrative:

The integration of advanced connectivity and precision technologies (such as the Starlink partnership, FieldOps platform, and in-house tech stack) positions CNH to capture greater recurring, higher-margin revenue streams from software, data, and tech-enabled services. This is expected to support net margin and long-term earnings growth.

Read the complete narrative.

Want to see what is behind this aggressive valuation? The math leans heavily on sharply higher future margins and next-level earnings growth. Curious about the bold assumptions hiding in plain sight? Unpack the narrative’s full recipe and see which key forecasts are moving the needle.

Result: Fair Value of $13.12 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent tariff pressures and high inventory levels could undermine the recovery narrative. These factors could put further pressure on margins if demand fails to rebound soon.

Find out about the key risks to this CNH Industrial narrative.

Another View: What About Peer Comparisons?

While DCF analysis points to undervaluation, looking at the company’s market valuation paints a mixed picture. CNH trades at a price-to-earnings ratio of 19.7x, which is higher than the peer average of 18.7x, but lower than the broader U.S. Machinery industry at 24.9x. The fair ratio is even higher at 36.6x, suggesting the market’s expectations may shift. Does the higher multiple versus peers signal risk, or is the market underestimating future performance?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own CNH Industrial Narrative

If you see things differently or want to dig into the numbers yourself, you can easily craft your own take in just a few minutes. Do it your way

A great starting point for your CNH Industrial research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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