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CNH (CNHI) Moves 6.1% Higher: Will This Strength Last?

CNH Industrial (CNHI) shares soared 6.1% in the last trading session to close at $12.22. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5.6% loss over the past four weeks.

Shares rose more than 6% yesterday after Deutsche Bank raised the price target of CNH Industrial to $18, maintaining a ‘Buy’ rating on the stock. CNHI is riding on the strength of its acquisitions. Raven Industries and Sampierana buyouts are set to bolster the prospects of CNH Industrial's Agriculture and Construction segments, respectively.

This truck, tractor and bus maker is expected to post quarterly earnings of $0.32 per share in its upcoming report, which represents a year-over-year change of -11.1%. Revenues are expected to be $5.36 billion, down 32.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For CNH, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CNHI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

CNH belongs to the Zacks Automotive - Foreign industry. Another stock from the same industry, ElectraMeccanica Vehicles Corp. (SOLO), closed the last trading session 1.9% lower at $1.06. Over the past month, SOLO has returned -21.2%.

ElectraMeccanica Vehicles Corp.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.14. Compared to the company's year-ago EPS, this represents a change of -27.3%. ElectraMeccanica Vehicles Corp. currently boasts a Zacks Rank of #4 (Sell).


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