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CNH Industrial (CNHI) to Enrich Portfolio With NX9 Buyout

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CNH Industrial CNHI recently announced the acquisition of NX9 – a software engineering company with expertise in ISOBUS technology – in a bid to rev up digital innovation in its agricultural unit. The financial details of the deal are still under wraps.

Based in the United States, NX9 is a small software house delivering ISOBUS capabilities for agricultural equipment.

ISOBUS is a plug-and-play solution for customers and is a crucial element of digital agricultural offerings. CNH Industrial has always been an ardent advocator of ISOBUS, an industry-standard communication protocol that allows machines and tools to communicate with each other. The company has always acknowledged the importance of this technology and supported its role in streamlining automated farming operations.

This buyout builds upon CNH Industrial’s strategic efforts to develop more state-of-the-art products in the precision agriculture space and help its agricultural customers realize the true capabilities of their operations. Moreover, the acquisition represents the amalgamation of in-house digital agriculture prowess that will massively enhance the company’s product portfolio, brand loyalty, distribution network and supply-chain stability.

The takeover will consolidate ISOBUS core technologies and applications across the entire electrical vehicle (EV) architecture of CNH Industrial’s core agriculture product portfolio. Further, it will help the Italian-American vehicle maker leverage theNX9 team’s expertise, thereby serving its customers and dealers more effectively.

The takeover is considered revolutionary as it showcases CNH Industrial’s continued dedication to investing in companies, which will fortify its foothold worldwide. CNH Industrial considers strategic acquisitions crucial in its quest to grow profitably. The latest deal will help unlock new acquisition opportunities for CNH Industrial, allowing it to expand its business further.

Meanwhile, CNH Industrial plans to complete the spin-off of its low margin-generating Iveco truck and bus units early next year along with the company’s FPT engine division, in a bid to enhance asset values and streamline businesses. The split business will be separately listed under the Iveco Group name. After the spin-off, CNH Industrial plans to focus on its agriculture machine and construction equipment businesses.

Earlier this year, the company entered into a $2.1-billion deal to buy Raven Industries to enhance its precision farming portfolio by giving access to cutting-edge technology.

CNH Industrial currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Auto Companies to Focus On

A few better-ranked stocks in the auto space include Tesla TSLA, Goodyear Tire GT and Harley-Davidson HOG, all of which flaunt a Zacks Rank of 1.

Tesla has an expected earnings growth rate of 166.96% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 6 cents over the last 30 days.
 
Tesla beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. TSLA has a trailing four-quarter earnings surprise of 25.38%, on average. Its shares have rallied 82.8% over the past year.

Goodyear has an expected earnings growth rate of 196.86% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 42 cents over the last 30 days.
 
Goodyear beat the Zacks Consensus Estimate for earnings in the last four quarters. GT has a trailing four-quarter earnings surprise of 228.45%, on average. Its shares have rallied 98.8% over the past year.

Harley-Davidson has an expected earnings growth rate of 34.92% for the current quarter. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 14 cents over the last 30 days.  

Harley-Davidson beat the Zacks Consensus Estimate for earnings in three of the last four quarters while missing once. HOG has a trailing four-quarter negative earnings surprise of 138.45%, on average. Its shares have dropped around 5.3% over the past year.


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