Value
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 9.7 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 8.0 |
| PEG | 9.7 |
| Analyst target | 7.5 |
- ▸Forward P/E: 15.1x
- ▸PEG: 0.54
CNH · Why this verdict
Why CNH Industrial (CNH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
CNH Industrial's business quality sits below the investment minimum with no identified competitive advantage, revenue in slight decline, and a flagged dividend yield trap; analyst consensus implies roughly 12% upside at a PEG of 0.61, but quality and execution concerns keep the risk/reward from being actionable at current prices.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Business quality scores at 2.8 against a 4.0 minimum floor, with no identified competitive advantage, free cash flow converting at only 64% of net income, and a Piotroski score of 4 out of 9—collectively indicating a franchise without the durability to support a confident long thesis. Quality breakdown | Quality score rises above 4.0 and free cash flow conversion improves above 80% of net income for 2 consecutive reporting periods. | →Stable |
| CounterIndustrial machinery businesses often show depressed quality metrics during cyclical troughs; if end-market demand recovers and pricing power improves, the quality metrics may recover meaningfully without any structural change in the business model. | ||
Analyst consensus implies roughly 12% upside to the take-profit target of $11.97, and the stock trades at a PEG of 0.61—suggesting the market is paying less than one times the projected growth rate—which represents a potentially meaningful discount if earnings power recovers. Sentiment breakdown | Price rises above the $11.97 take-profit target and sustains there for 5 or more consecutive trading days, confirming the upside gap has closed. | ↑Improving |
| CounterAnalyst targets embed assumptions about an earnings recovery that remains unproven given absent revenue growth; a consensus built on a cyclical rebound can compress rapidly if the recovery does not materialize on schedule, leaving the valuation argument hollow. | ||
Revenue is in slight decline and earnings growth is essentially absent, leaving the company without an organic growth engine that would support a premium multiple or justify near-term price appreciation. Growth breakdown | Revenue growth turns positive above 2% year-over-year for 2 consecutive quarters, signaling a genuine demand recovery. | →Stable |
| CounterA flat-to-declining revenue base in farm and heavy construction machinery is consistent with an industry cyclical trough; if order books begin recovering and dealer inventory normalization completes, revenue can inflect positively within a few quarters. | ||
The dividend is flagged as an unsafe high-yield situation—a yield trap—meaning the current payout may not be sustainably covered by earnings or free cash flow, creating the risk of a dividend cut that would remove an apparent income rationale for holding the stock. Catalyst breakdown | Free cash flow conversion rises above 80% of net income for 2 consecutive quarters, from the current 64%, demonstrating the payout has a durable cash-flow foundation. | ↓Deteriorating |
| CounterIf the cyclical earnings recovery materializes, cash generation may improve sufficiently to cover the payout without a cut; many industrial companies maintain dividends through cyclical troughs specifically to signal management confidence in the recovery. | ||
Business quality scores at 2.8 against a 4.0 minimum floor, with no identified competitive advantage, free cash flow converting at only 64% of net income, and a Piotroski score of 4 out of 9—collectively indicating a franchise without the durability to support a confident long thesis.
→StableQuality breakdown
- Expectation
- Quality score rises above 4.0 and free cash flow conversion improves above 80% of net income for 2 consecutive reporting periods.
CounterIndustrial machinery businesses often show depressed quality metrics during cyclical troughs; if end-market demand recovers and pricing power improves, the quality metrics may recover meaningfully without any structural change in the business model.
Analyst consensus implies roughly 12% upside to the take-profit target of $11.97, and the stock trades at a PEG of 0.61—suggesting the market is paying less than one times the projected growth rate—which represents a potentially meaningful discount if earnings power recovers.
↑ImprovingSentiment breakdown
- Expectation
- Price rises above the $11.97 take-profit target and sustains there for 5 or more consecutive trading days, confirming the upside gap has closed.
CounterAnalyst targets embed assumptions about an earnings recovery that remains unproven given absent revenue growth; a consensus built on a cyclical rebound can compress rapidly if the recovery does not materialize on schedule, leaving the valuation argument hollow.
Revenue is in slight decline and earnings growth is essentially absent, leaving the company without an organic growth engine that would support a premium multiple or justify near-term price appreciation.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive above 2% year-over-year for 2 consecutive quarters, signaling a genuine demand recovery.
CounterA flat-to-declining revenue base in farm and heavy construction machinery is consistent with an industry cyclical trough; if order books begin recovering and dealer inventory normalization completes, revenue can inflect positively within a few quarters.
The dividend is flagged as an unsafe high-yield situation—a yield trap—meaning the current payout may not be sustainably covered by earnings or free cash flow, creating the risk of a dividend cut that would remove an apparent income rationale for holding the stock.
↓DeterioratingCatalyst breakdown
- Expectation
- Free cash flow conversion rises above 80% of net income for 2 consecutive quarters, from the current 64%, demonstrating the payout has a durable cash-flow foundation.
CounterIf the cyclical earnings recovery materializes, cash generation may improve sufficiently to cover the payout without a cut; many industrial companies maintain dividends through cyclical troughs specifically to signal management confidence in the recovery.
Per-dimension breakdown
Quality
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.3 |
| ROA | 0.6 |
| Gross margin | 0.0 |
| Op margin | 2.2 |
| Net margin | 0.9 |
| Current ratio | 8.1 |
| FCF quality | 10.0 |
| Moat | 3.8 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 182% FCF/NI
- ▸No competitive moat
Growth
1.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.0 |
| EPS growth | 0.0 |
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 3.1 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 0.4 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+0.0%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.0 |
| Analyst rating | 7.5 |
| Price target | 8.4 |
- ▸LLM news sentiment: +0.40 (n=1)
- ▸Analyst upside: 28%
Insider
5.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.4 |
| notable moves | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.6 |
| quality rank | 3.9 |
| growth rank | 3.3 |
Technical
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.1 |
| support resistance | 8.3 |
| 52w position | 5.6 |
Risk (lower is worse)
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.1 |
| days to cover | 4.3 |
| volatility | 0.0 |
| put call | 2.7 |
| implied vol | 1.8 |
| max pain risk | 7.0 |
| beta | 6.1 |
| debt equity | 1.6 |
- ▸Elevated put/call: 1.60
- ▸High IV: 69%
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.2 |
| news activity | 5.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- ASYMMETRY:1.5>=1.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.40
- EARNINGS_PROXIMITY:84d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:4.0<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.50
Upside
+15.1%
Downside
10.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 4.0<4.5 outcome against Sentiment at 7.6 and asymmetric R:R of 1.50.
The strongest dimensions are Sentiment at 7.6, Technical at 7.0, and Value at 6.7; the weakest are Growth at 1.5, Peer rank at 2.6, and Risk (lower is worse) at 3.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 1.50 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Threshold No Moat
Trip ifQuality score rises above 4.0 for 2 consecutive reporting periods.
- P2Analyst Consensus Implies Meaningful Upside
Trip ifPrice rises above $11.97 and sustains there for more than 5 consecutive trading days.
- P3Revenue Contraction Growth Absent
Trip ifRevenue growth turns positive above 2% year-over-year for 2 consecutive quarters.
- P4Dividend Yield Trap Payout Risk
Trip ifFree cash flow conversion rises above 80% of net income for 2 consecutive quarters, from current 64%.