Key Takeaways:
- Price Projection: Based on valuation assumptions tied to earnings normalization, CNH Industrial stock could reach $14 by December 2027.
- Potential Gains: This price target represents about 40% total return from the current $10 share price, driven primarily by margin recovery rather than revenue growth.
- Annual Return: The implied return is approximately 18% annually over the next two years, reflecting normalization from depressed profitability rather than multiple expansion.
Shares of CNH Industrial (CNH) shares trade at $10 today, and based on our updated valuation through December 2027, the stock is worth $14 implying a 38% total return over two years, or 17.8% annualized.
Recently, CNH highlighted its ongoing product investment by unveiling a new generation of New Holland agricultural machinery ahead of the LAMMA Show 2026, reinforcing its focus on productivity and technology despite a softer demand backdrop.
CNH generates more than $18 billion in annual revenue, but the business is emerging from a sharp agricultural down-cycle following peak demand conditions earlier in the cycle.
Revenue declined approximately 20% year over year most recently that follows a period of elevated demand earlier in the cycle, with longer-term results better characterized by volatility than structural contraction.
Forward estimates suggest revenue stabilizes rather than recovers, remaining within a relatively tight range through 2027 as end-market conditions remain subdued.
Profitability has compressed alongside volumes, with CNH producing roughly 7% EBIT margins over the last twelve months, down meaningfully from prior cycle highs.
Margins are expected to recover modestly from trough levels, though they remain well below peak and point to a business operating closer to mid-cycle conditions than expansion mode.
The valuation question now is whether earnings stabilize enough to support reasonable returns from today’s price, not whether the business re-enters a growth cycle.
What the Model Says for CNH Stock
The model assumes revenue increases 1% annually through 2027, with operating margins of 4,2%, and the stock exits at an 17.1× P/E multiple.
Under these assumptions, CNH reaches a $14 share price by the first quarter of 2028 delivering 18% annualized returns.
Importantly, this outcome does not require a rebound to peak demand or margin expansion back to cycle highs.
Returns are driven by earnings stabilization and normalization, not growth acceleration or multiple expansion.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for CNH stock:
1. Revenue Growth: 1.0%
CNH’s revenue declined about 20% year over year, reflecting softer demand and cyclical pressure across agricultural and construction equipment end markets.
Equipment demand remains linked to macro conditions, financing availability, and commodity prices, limiting visibility for a sustained volume rebound in the near term.
According to street consensus estimates, a 1% revenue growth assumption reflects post-cycle normalization with limited support from replacement demand or geographic diversification.
2. Operating Margins: 4.2%
The company’s operating margins have compressed meaningfully from prior cycle levels, with LTM operating margins around 5%, compared with roughly 9% to 10% previously.
Margin pressure persists as pricing remains competitive in primary equipment, even as volumes stabilize and cost actions partially offset demand weakness.
Incremental support comes from cost control and aftermarket resilience, though these factors are insufficient to restore peak-cycle profitability.
As reflected in consensus expectations, operating margins of 4.2% balance efficiency improvements against ongoing pricing pressure and cycle normalization without assuming aggressive recovery.
3. Exit P/E Multiple: 17.1x
CNH historically traded at around 12x forward earnings, with longer-term averages skewing lower due to cyclicality.
Industrial cyclical businesses rarely sustain premium multiples without credible growth visibility. However, balance sheet stability and normalized earnings power through the cycle still justify a reasonable valuation base.
Based on aggregated analyst estimates, a 17.1× multiple reflects a modest discount to historical levels while still recognizing CNH as a durable, cash-generating industrial business.
Stress-test CNH’s returns across peak, mid-cycle, and downturn scenarios with TIKR →
What Happens If Things Go Better or Worse?
CNH outcomes depend on whether agricultural demand stabilizes, margins recover from trough levels, and valuation remains tied to earnings normalization rather than a renewed growth cycle. Here is how CNH stock might look in different scenarios through 2027.
- Low Case: If revenue growth continues to decline reaching 1.5% and net income margins slip below 5%→ 12% annual return.
- Mid Case: With 1.7% revenue growth and net income margins of 5.2% → 18% annual return.
- High Case: If revenue stabilizes sooner and reach 1.9% with net income margins firm around 6% → 24% annual return.
CNH is moving from a deep cycle downturn toward an earnings repair phase, where margin stability matters more than top-line acceleration.
From $10 today, outcomes range from 12% to 24% annually through 2027, depending on margin normalization, revenue stabilization, and limited valuation expansion.
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How Much Upside Does CNH Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
Build your own valuation model for CNH with TIKR (It’s free) →
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
