Deutsche Bank Starts CNH Global NV (CNHI) at Sell
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Deutsche Bank initiated coverage on CNH Global NV (NYSE: CNHI) with a Sell rating and a price target of $6.38. Analyst Nicole DeBlase said dealer inventory is still too high.
"CNHI management recently noted on its 2Q16 earnings call that Ag Equipment segment sales should stabilize in 2017e as volumes recouple with end user demand after two years of underproduction. We acknowledge evidence of progress within combines, as dealer inventory has fallen >60% vs. 2013 peak levels – but HHP tractor inventory has hardly come down vs. peak. We also see little promise of recovery in international markets, given that crop prices are down materially Y/Y. As such, we forecast Ag Equipment segment revenue and profit down 4% and 14% Y/Y, respectively, in 2017e. This, coupled with an expected 15% decline in FinCo income, is likely responsible for the 24% gap between DB and consensus EPS forecasts," said DeBlase.
Shares of CNH Global NV closed at $7.45 yesterday.
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