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What Are Analysts Saying About CNH Industrial N.V.'s (NYSE:CNHI) Growth?

CNH Industrial N.V.'s (NYSE:CNHI) announced its latest earnings update in December 2018, which signalled that the company benefited from a significant tailwind, more than doubling its earnings from the prior year. Below, I've laid out key growth figures on how market analysts perceive CNH Industrial's earnings growth outlook over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

Check out our latest analysis for CNH Industrial

Market analysts' consensus outlook for the coming year seems rather muted, with earnings climbing by a single digit 8.2%. The growth outlook in the following year seems much more buoyant with rates arriving at double digit 19% compared to today’s earnings, and finally hitting US$1.4b by 2022.

NYSE:CNHI Past and Future Earnings, April 12th 2019
NYSE:CNHI Past and Future Earnings, April 12th 2019

Although it is helpful to be aware of the rate of growth year by year relative to today’s level, it may be more beneficial evaluating the rate at which the business is moving every year, on average. The pro of this method is that we can get a bigger picture of the direction of CNH Industrial's earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 8.4%. This means, we can presume CNH Industrial will grow its earnings by 8.4% every year for the next few years.

Next Steps:

For CNH Industrial, I've compiled three pertinent aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.

  2. Valuation: What is CNHI worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CNHI is currently mispriced by the market.

  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of CNHI? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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