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On Tuesday, Oppenheimer analyst Kristen Owen upgraded CNH Global (NYSE:CNH) stock from Perform to Outperform, establishing a new price target of $16.00. The target sits well above the current price of $13.16, though InvestingPro analysis suggests the stock is currently trading above its Fair Value. This upgrade comes as the company enters what is believed to be the trough in earnings per share (EPS) for 2025, following a multi-year decline in equipment sales.
According to Owen, the improvement in investor sentiment post-3Q earnings season has set the stage for potential catalysts that could drive a reversion trade for CNH Global in 2025. The firm's analysts suggest that with competitors like DE and AGCO already issuing guidance for 2025, CNH has the advantage of a "lowered bar" as it approaches its 4Q results.
Despite the ongoing challenges in equipment fundamentals for the year 2025, there are positive signs that could support CNH's performance. Owen pointed out the recent uptick in grain prices, which may contribute to an increase in global farm income, providing a potential tailwind for the company.
Additionally, CNH Global may benefit from company-specific catalysts. These include the possibility of further cost savings programs, an investor day scheduled for May, and potential monetization of its construction segment. These factors combined have led to a more optimistic outlook for CNH Global's stock, as reflected in the upgrade and new price target set by Oppenheimer.
In other recent news, CNH Global's third-quarter earnings report showed lower-than-expected results, prompting a revision of its full-year 2024 guidance downward. The company reported adjusted earnings per share of $0.24, missing the anticipated $0.27 mark. However, CNH Global's revenue of $4.65 billion exceeded the consensus estimate of $4.4 billion, despite a 22% year-on-year decline. Following these developments, Bernstein upgraded CNH Global's stock rating from Market Perform to Outperform, citing confidence in the company's future performance. Conversely, Northland downgraded the stock from Outperform to Market Perform, maintaining a steady price target of $18.00. The firm indicated it might reconsider an upgrade upon observing signs of market stabilization. Furthermore, CNH Global plans substantial production cuts in the first half of 2025 to adjust dealer inventories to match waning demand. Lastly, the company adjusted its 2024 EPS guidance to a range of $1.05 to $1.15, significantly lower than the previous forecast of $1.30 to $1.40.
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