Yahoo Finance The CNH Industrial N.V. (NYSE:CNHI) First-Quarter Results Are Out And Analysts Have Published New Forecasts
It's been a good week for CNH Industrial N.V. (NYSE:CNHI) shareholders, because the company has just released its latest first-quarter results, and the shares gained 5.4% to US$14.92. CNH Industrial reported in line with analyst predictions, delivering revenues of US$4.6b and statutory earnings per share of US$0.24, suggesting the business is executing well and in line with its plan. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for CNH Industrial
Taking into account the latest results, the current consensus, from the 13 analysts covering CNH Industrial, is for revenues of US$21.2b in 2022, which would reflect a painful 38% reduction in CNH Industrial's sales over the past 12 months. Per-share earnings are expected to increase 8.4% to US$1.37. In the lead-up to this report, the analysts had been modelling revenues of US$21.2b and earnings per share (EPS) of US$1.32 in 2022. So the consensus seems to have become somewhat more optimistic on CNH Industrial's earnings potential following these results.
There's been no major changes to the consensus price target of US$18.71, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values CNH Industrial at US$21.00 per share, while the most bearish prices it at US$12.80. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 47% by the end of 2022. This indicates a significant reduction from annual growth of 3.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 6.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - CNH Industrial is expected to lag the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CNH Industrial's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple CNH Industrial analysts - going out to 2024, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with CNH Industrial (including 1 which is a bit concerning) .
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
