In a report released yesterday, Angel Castillo from Morgan Stanley maintained a Buy rating on CNH Industrial (CNH – Research Report), with a price target of $16.50.
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Angel Castillo’s rating is based on several factors that suggest potential growth for CNH Industrial despite a recent earnings miss. The company’s 4Q24 earnings were slightly below expectations, particularly in the Agriculture Equipment segment, but this was partially offset by stronger performances in Financial Services and Construction Equipment. Looking forward, CNH’s guidance for 2025, while conservative, is seen as a strategic move to de-risk the company’s outlook and manage investor expectations effectively.
Additionally, the company’s proactive efforts to reduce inventory levels by over $700 million in 4Q24 indicate a strong commitment to operational efficiency, which may help cushion against market challenges. The anticipated improvement in the Agriculture segment’s margins further supports a positive long-term outlook, suggesting that CNH’s cost management strategies are bearing fruit. These elements combined contribute to Castillo’s confidence in the company’s future performance, justifying the Buy rating.
In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $16.00 price target.