Oppenheimer upgrades CNH stock to outperform on EPS trough visibility

Investing.com -- Oppenheimer upgraded CNH Industrial (NYSE: CNH) to "Outperform" from "Perform" and set a $16 price target due to an improved visibility on earnings bottoming out in 2025 and potential catalysts for recovery.

“We believe CNH is approaching trough EPS in 2025,” analyst said.

“Coming out of 3Q earnings season, investor sentiment in the space has improved, and we see incremental catalysts in 2025 helping to support a reversion trade for CNH.”

The brokerage noted that while equipment fundamentals remain challenging, CNH’s 2025 guidance is de-risked following conservative outlooks from peers Deere&Co (NYSE: DE) and AGCO Corp. Recent grain price improvements are seen as a potential boost to global farm income, providing a tailwind for equipment demand.

Oppenheimer noted CNH’s cost-saving initiatives, including strategic sourcing programs expected to deliver incremental benefits in 2025, as well as its healthy decremental margins. It also flagged potential monetization or partnerships in CNH’s construction segment as a key opportunity to unlock value and improve overall company margins.

While macroeconomic risks and execution challenges remain, Oppenheimer sees CNH positioned for a recovery trade, supported by low investor expectations and catalysts such as its investor day.

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