CNH Industrial N.V. (CNH): A Bull Case Theory

We came across a bullish thesis on CNH Industrial N.V. on Monopolistic Investor’s Substack by Antoni Nabzdyk. In this article, we will summarize the bulls’ thesis on CNH. CNH Industrial N.V.’s share was trading at $13.21 as of July 24^th. CNH’s trailing and forward P/E were 16.51 and 22.03, respectively according to Yahoo Finance.

CNH Industrial N.V. (CNH) designs, produces, and sells agricultural and construction equipment globally, supported by a financial services arm that offers retail and wholesale financing to customers and dealers. Its portfolio includes recognized brands like Case IH, New Holland, and CASE Construction Equipment, with a capital-intensive model that provides barriers to entry and a sticky dealer network of over 2,500 dealers in 6,000+ locations.

Despite these structural advantages, CNH is struggling with severe top-line pressure; Q1 2025 revenue fell 21% year-over-year to $3.8 billion, with industrial net sales down 23%. Adjusted net income declined 86% to $132 million, and adjusted EPS fell 80%. Profit margins remain positive, with gross margins at 20.34% and net margins at 5.35%, but the company faces a heavy debt burden—$26.4 billion of total debt against just $1.4 billion of cash, resulting in a negative net cash position of nearly $25 billion—leaving it vulnerable to higher interest rates and limiting strategic flexibility.

Market share is also under pressure; CNH holds just 10.2% versus Caterpillar’s 33.3% and Deere’s 26.5%. Investments remain focused on future growth, with $103 million in CapEx and $184 million in R&D during Q1, largely for new product and digital initiatives. However, persistent negative revenue growth undermines valuation: DCF scenarios suggest that shares are potentially overvalued by up to 73% if declines continue, though under moderate assumptions, they may be marginally undervalued.

Capital allocation priorities emphasize organic growth, balance sheet repair, and shareholder returns, but near-term prospects appear challenged. Overall, CNH represents a structurally entrenched yet financially pressured player, with turnaround potential overshadowed by declining fundamentals and leverage concerns.

Previously, we covered a bullish thesis on Oshkosh Corporation (NYSE:OSK) by wirsteve in December 2024, which highlighted the secured USPS contract and upcoming CES 2025 product innovations as key catalysts. The company’s stock price has appreciated by approximately 36.22% since our coverage. This is because the USPS contract strengthened revenue visibility and investor confidence. The thesis still stands as growth drivers remain intact. Antoni Nabzdyk shares a similar view but emphasizes CNH’s entrenched position facing margin pressure and leverage challenges.

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Disclosure: None.