CNH Industrial Earnings: Moderating Ag Demand in South America Pressures Third-Quarter Ag Sales

CNH reported weaker third-quarter earnings than we expected. This led us to decrease our fair value estimate to $15.80 from $16.60 previously. The nearly 5% decline in our fair value is a result of our lower sales expectations for 2023 and 2024. CNH had previously been calling for 8%-11% sales growth in 2023 but has since reduced its target to 3%-6% sales growth. Now, we expect 3% sales growth in 2023, the low end of guidance. Our updated thinking is largely driven by the market challenges in South America.