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Opinions The Panic-Proof Portfolio (Stockchase Research)
CNHI IndustrialCNHITOP PICKJan 23, 2024
N/A
Stock price when the opinion was issued
$13.98
As of May 02, 2023. Market Open.
agriculture
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BUY
Recently spun off its vehicle business to become a pure agricultural and construction equipment play. However, it sells off whenever there are fears of Fed hikes triggering a recession. Their last quarter was excellent and they raised their full-year sales forecast. Shares jumped 6%, though it's still down for the year.
agriculture
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)