CNH · CNH Industrial
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $14.40
Note written ·
Price against the kill line
17.3% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $14.40, on record since 11 November 2026. The shares are up 15.7% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $14.40, just under the $14.46 52-week intraday high of 4 September 2026, which would show the shares leading the S&P 500; so would a 2027 outlook that guides agriculture net sales higher.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 9 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 4,354
- Revenue, change on a year (%)
- −1.0
- Gross margin (%)
- 33.7
- Net cash, cash less debt ($M)
- −23,888
- Price to earnings (×)
- 56.4
- Enterprise value to sales (×)
- 2.1
All filed numbers
What CNH Industrial reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) |
|---|---|---|---|
| first filed | 4,354 | −1.0 | 33.7 |
| first filed | 4,803 | +2.0 | 29.3 |
| first filed | 3,826 | −0.1 | 31.9 |
| first filed | 5,157 | +5.8 | 29.6 |
| first filed | 4,399 | −5.5 | 31.9 |
| first filed | 4,711 | −14.2 | 32.2 |
| Pre-tax income ($M) | 227 |
| Net income ($M) four quarters: 261 | 30.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −1.1 |
| Operating cash flow ($M) | 1,811 |
| Capital spending ($M) | Not reported |
| Free cash flow ($M) | Not available |
| Cash and short-term investments ($M) | 1,590 |
| Debt ($M) | 25,478 |
| Net cash, cash less debt ($M) | −23,888 |
| Deferred revenue ($M) +51.8% on a year | 170 |
| Backlog, orders not yet delivered ($M) +51.8% on a year | 170 |
| Receivables ($M) | Not reported |
| Inventory ($M) | 5,134 |
| Shareholders' equity ($M) including non-controlling interests | 7,824 |
| Market value ($M) | 14,714 |
| Enterprise value, market value plus net debt ($M) | 38,602 |
| Enterprise value to sales (×) | 2.1 |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 56.4 |
| Price to book value (×) | 1.9 |
| Free-cash-flow yield (%) | Not available |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.9% of shares outstanding sold short, 3.1 days of average trading to cover, −5.8% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $500K | $490K |
The thesis
CNH Industrial beat third-quarter estimates and raised its 2026 earnings guidance on 9 November 2026, but tariff refunds drove much of the beat and farm-equipment demand is still falling. The shares are therefore more likely to lag the S&P 500 than lead it over the next three months. The 2027 outlook, due with fourth-quarter results in early February 2027, settles whether the farm recovery has started.
The third-quarter release reported adjusted diluted earnings per share (EPS) of $0.16, up from $0.08 a year earlier and ahead of the $0.10 consensus estimate cited by Benzinga. Full-year adjusted EPS guidance rose to $0.44–$0.48 from $0.41–$0.46. Agriculture is the core of the case, and there the company narrowed its 2026 adjusted EBIT (earnings before interest and taxes) margin range to 5.1–5.4% from 5.0–5.5%. The low end went up and the high end came down. Management called the 2027 outlook "uncertain."
The same day, CNH agreed to sell 70% of its construction equipment business to Kobelco Construction Machinery, a Kobe Steel subsidiary, at a $1 billion enterprise value. CNH expects about $700 million in cash and will use it to reduce debt. The deal is expected to close by the end of 2027, which leaves CNH a more purely agricultural company that keeps a 30% stake in construction.
The market has already priced some recovery. The shares closed at $12.49 on 11 November 2026, up 20.2% over three months and above their 200-day moving average. The jump to a $12.82 close on 9 November 2026 had partly reversed within two sessions.
Bullish and bearish views on CNH INDUSTRIAL N.V.
The bull case on CNH INDUSTRIAL N.V. (CNH), in brief: earnings and cash guidance both went up. The bear case: tariff refunds drove the quarterly beat.
Bull case
- Earnings and cash guidance both went up. On 9 November 2026 CNH raised full-year adjusted EPS guidance to $0.44–$0.48 and industrial free cash flow guidance to $300–$450 million, from $200–$400 million. Third-quarter industrial free cash flow was −$10 million, against −$188 million a year earlier.
- Construction sale funds debt reduction. The Kobelco agreement of 9 November 2026 values construction equipment at $1 billion and is expected to bring in about $700 million in cash for debt reduction, subject to closing adjustments.
- Most targets rose after the report. On 10 November 2026 Barclays raised its target to $15 (Overweight) and Baird raised its target to $16 (Outperform). Truist's target is $16 (Buy) and Evercore ISI's is $17.50 (Outperform).
- Management sees the trough ending. The 9 November 2026 release cites "improving cycle indicators in North America" and says agriculture is approaching the end of its cyclical trough. North American construction demand rose 10% in the quarter.
Bear case
- Tariff refunds drove the quarterly beat. Third-quarter results included $109 million in pre-tax tariff refunds, per the 9 November 2026 release. Agriculture adjusted EBIT rose to $173 million from $137 million, a 6.0% margin, helped by $32 million of net refund benefit. The company plans to reinvest most of the agriculture refunds.
- Farm-equipment volumes are still falling. In the third quarter, North American industry sales of tractors over 140 horsepower fell 5% and combines fell 13%. South American tractors fell 22% and combines 19%, per the 9 November 2026 release. Agriculture net sales fell 2% to $2.907 billion.
- South American credit stress is rising. Financial Services loans 30 or more days past due rose to 4.1% from 3.5%, mainly from farmer stress in South America. The quarter carried a $156 million non-cash charge on Brazilian deferred tax assets, which cut reported net income to $35 million.
- Two firms cut targets and one sits below. On 10 November 2026 Truist lowered its target to $16 from $17 and Evercore ISI lowered its target to $17.50 from $18. JP Morgan kept Underweight with a $12 target, below the $12.49 close of 11 November 2026.
- Shareholder payouts are smaller. Dividends declared in the first nine months of 2026 were $0.10 per share, against $0.25 in the same period of 2025, per the third-quarter release.
Price setup
The shares closed at $12.49 on 11 November 2026. They closed at $11.56 on 6 November 2026, the last session before the report, and jumped to $12.82 on 9 November 2026. They then closed at $12.26 on 10 November 2026.
The last close sits just under the 50-day moving average of $12.58 and above the 200-day moving average of $11.32, both from adjusted daily closes as of 11 November 2026. The 52-week intraday high is $14.46, set on 4 September 2026, and the last close is 13.6% below it. The 52-week closing low is $9.22, set on 31 December 2025.
The three-month gain is 20.2%, measured from a $10.39 close on 13 August 2026. The $12.82 post-report close is the nearest level above. A move back over it, with the shares holding above the 50-day average, would show the market accepting the raised guidance.
SEC filings since the report are the 10-Q and two 8-Ks of 9 November 2026, one of them covering the Kobelco agreement. No Form 4 insider transactions are listed for that period.
Catalysts ahead
- 7 December 2026: Close of the FTC and USDA public comment window on agricultural equipment competition. Comments and any follow-up show whether the inquiry moves toward rules or enforcement on repair and dealer practices at large equipment makers.
- ~3 February 2027 (est.): Q4 2026 results and first 2027 outlook. The 2027 agriculture sales and margin guide shows whether the farm-equipment recovery has begun once one-off tariff refunds drop out.
What would change the view
A daily close above $14.40, just under the $14.46 52-week intraday high of 4 September 2026, which would show the shares leading the S&P 500; so would a 2027 outlook that guides agriculture net sales higher.
What it trades with
CNH trades with other farm and construction equipment makers. Its shares respond to crop prices, farm income and interest rates. The captive Financial Services arm ties earnings to farmer and dealer credit, and the third-quarter rise in South American delinquencies shows that link. Once the Kobelco deal closes, construction demand will matter less to CNH's results and the farm cycle more. The Federal Trade Commission (FTC) and US Department of Agriculture inquiry into agricultural equipment competition, open for public comment until 7 December 2026, applies to the whole group of large equipment makers.
The evidence, claim by claim (7)
- Q3 2026 adjusted diluted EPS was $0.16 versus $0.08 a year earlier; consolidated revenue was $4.354 billion, down 1%. CNH Q3 2026 results release · as of
- Q3 2026 agriculture net sales fell 2% to $2.907 billion; adjusted EBIT rose to $173 million (6.0% margin) from $137 million, including $32 million of net tariff refund benefit. CNH Q3 2026 results release · as of
- FY2026 adjusted EPS guidance raised to $0.44–$0.48 from $0.41–$0.46; industrial free cash flow to $300–$450 million from $200–$400 million; agriculture margin narrowed to 5.1–5.4%. CNH Q3 2026 results release · as of
- Q3 industry sales: North America tractors over 140 HP down 5%, combines down 13%; South America tractors down 22%, combines down 19%. CNH Q3 2026 results release · as of
- Financial Services 30+ day delinquencies rose to 4.1% from 3.5%; Q3 included a $156 million non-cash charge on Brazilian deferred tax assets. CNH Q3 2026 results release · as of
- CNH agreed to sell 70% of its construction equipment business to Kobelco at a $1 billion enterprise value, for about $700 million in cash, with closing expected by end-2027. CNH 8-K and press release · as of
- After Q3 results: Barclays target $15 (Overweight), Baird $16 (Outperform), Truist $16 from $17 (Buy), Evercore ISI $17.50 from $18, JP Morgan $12 (Underweight). Benzinga analyst ratings, 10 November 2026 · as of
Sources
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