Opinions
The Panic-Proof Portfolio (Stockchase Research)
CNHI Industrial
CNHI-N
TOP PICK
Apr 16, 2024
Stock price when the opinion was issued
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CNHI is the global leader in the manufacturing of agricultural combine harvesters. It continues to improve efficiency of its production line processes and integrate new technology to help farmers. It trades at 7x earnings, under 2x book value and supports a robust 32% ROE. It pays a good dividend, backed by a payout ratio under 25% of cash flow. It is prudently using some cash reserves to aggressively retire debt and buy back shares. We recommend placing a stop-loss at $9.50, looking to achieve $15.00 -- upside potential of 25%. Yield 3.2%
(Analysts’ price target is $15.07)We reiterate CNHI as a TOP PICK. Management is investing in AI technology to assist farmers, who purchase their equipment, in increasing yields, while driving improved machine performance. Quarterly data indicate the company continues to prudently use some cash reserves to aggressively retire debt. It trades at 8x earnings, under 2x book and supports a robust 31% ROE. Its dividend is backed by a modest payout ratio under 25% of cash flow. We recommend trailing up the stop (from $9.50) to $10.50, looking to achieve $15.00 -- upside of 20%. Yield 3.3%
(Analysts’ price target is $15.33)Our PAST TOP PICK with CNHI has triggered its stop at $11.50. To remain disciplined, we recommend covering the position at this time. When combined with our previous recommendations, this will result in a net investment loss of 5%.
We again reiterate CNHI as a TOP PICK. The company's strategic acquisitions is advancing automation into autonomous agriculture technology, while expanding its market in Europe. We like that quarterly cash reserves are growing, while debt is aggressively retired and shares bought back. It trades at 8x earnings, under 2x book and supports a robust 31% ROE. Its dividend is backed by a payout ratio under 25% of cash flow. We recommend trailing up the stop (from $10.50) to $11.50 at this time, looking to achieve $15.50 -- upside potential of 21%.
(Analysts’ price target is $15.63)