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CNH Industrial (CNHI) to Buy Back Shares of up to $700M

Zacks Equity Research

CNH Industrial N.V. CNHI made the announcement to restart its share buyback program. This involves the repurchase of up to $700 million from time to time. In fact, the company already spent $65.5 million of the total amount.

CNH Industrial, with principal office in London, U.K., offers vehicles for agricultural and industrial purposes. Its products range from tractors to trucks and buses along with powertrain solutions for off and on-road, and marine vehicles.

This share repurchase program is intended to optimize the capital structure of the company and to meet obligations arising from its equity incentive plans. The program has duration till Oct 12, 2019, and will be funded by CNH Industrial’s liquidity.

In the first quarter of 2019, the company’s earnings beat the Zacks Consensus Estimate while revenues missed the same. When compared with the year-ago quarter, earnings witnessed an increase while revenues plunged. Strong price realization, along with decent performance in North and South America, is driving the company’s agricultural equipment segment.

Shares of CNH Industrial have underperformed the industry it belongs to in the past three months. Over this time frame, shares of the company have plunged 21.4% compared with the industry’s decline of 8.2%.

CNH Industrial currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the auto space are Ford Motor Company F, Fox Factory Holding Corp. FOXF and Cummins Inc. CMI, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ford has an expected long-term growth rate of 7.3%. Over the past three months, shares of the company have gained 12.5%.

Fox Factory has an expected long-term growth rate of 16.4%. Over the past three months, shares of the company have gained 4.5%.

Cummins has an expected long-term growth rate of 8.4%. Share price of the company has increased 2% in the past six months.

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