Intrinsic value of CNH Industrial - CNHI

Previous Close

$11.60

  Intrinsic Value

$11.21

stock screener

  Rating & Target

hold

-3%

Previous close

$11.60

 
Intrinsic value

$11.21

 
Up/down potential

-3%

 
Rating

hold

We calculate the intrinsic value of CNHI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 15.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
Revenue, $m
  30,097
  32,956
  35,939
  39,046
  42,279
  45,641
  49,136
  52,768
  56,542
  60,464
  64,542
  68,782
  73,192
  77,782
  82,561
  87,538
  92,726
  98,136
  103,779
  109,669
  115,819
  122,244
  128,958
  135,977
  143,319
  150,999
  159,037
  167,451
  176,262
  185,490
Variable operating expenses, $m
  22,753
  24,857
  27,052
  29,338
  31,717
  34,191
  36,763
  39,435
  42,213
  45,099
  47,493
  50,613
  53,858
  57,236
  60,752
  64,415
  68,233
  72,214
  76,366
  80,700
  85,226
  89,953
  94,894
  100,059
  105,461
  111,113
  117,027
  123,219
  129,702
  136,493
Fixed operating expenses, $m
  5,235
  5,350
  5,468
  5,588
  5,711
  5,836
  5,965
  6,096
  6,230
  6,367
  6,507
  6,650
  6,797
  6,946
  7,099
  7,255
  7,415
  7,578
  7,745
  7,915
  8,089
  8,267
  8,449
  8,635
  8,825
  9,019
  9,218
  9,420
  9,628
  9,839
Total operating expenses, $m
  27,988
  30,207
  32,520
  34,926
  37,428
  40,027
  42,728
  45,531
  48,443
  51,466
  54,000
  57,263
  60,655
  64,182
  67,851
  71,670
  75,648
  79,792
  84,111
  88,615
  93,315
  98,220
  103,343
  108,694
  114,286
  120,132
  126,245
  132,639
  139,330
  146,332
Operating income, $m
  2,109
  2,750
  3,420
  4,120
  4,851
  5,614
  6,408
  7,237
  8,099
  8,998
  10,541
  11,518
  12,537
  13,600
  14,709
  15,868
  17,079
  18,344
  19,668
  21,054
  22,504
  24,023
  25,615
  27,283
  29,032
  30,867
  32,792
  34,812
  36,932
  39,157
EBITDA, $m
  8,494
  9,683
  10,926
  12,223
  13,575
  14,983
  16,449
  17,974
  19,561
  21,214
  22,933
  24,724
  26,590
  28,534
  30,561
  32,675
  34,882
  37,187
  39,594
  42,110
  44,742
  47,494
  50,375
  53,391
  56,550
  59,859
  63,327
  66,962
  70,774
  74,772
Interest expense (income), $m
  930
  4,008
  4,309
  4,625
  4,954
  5,297
  5,655
  6,026
  6,412
  6,813
  7,230
  7,663
  8,113
  8,582
  9,069
  9,576
  10,103
  10,653
  11,226
  11,824
  12,447
  13,097
  13,777
  14,486
  15,228
  16,003
  16,814
  17,662
  18,550
  19,479
  20,452
Earnings before tax, $m
  -1,899
  -1,560
  -1,205
  -834
  -446
  -41
  383
  825
  1,286
  1,769
  2,878
  3,405
  3,955
  4,531
  5,134
  5,764
  6,425
  7,118
  7,845
  8,607
  9,407
  10,247
  11,129
  12,056
  13,029
  14,053
  15,130
  16,262
  17,453
  18,705
Tax expense, $m
  0
  0
  0
  0
  0
  0
  103
  223
  347
  478
  777
  919
  1,068
  1,223
  1,386
  1,556
  1,735
  1,922
  2,118
  2,324
  2,540
  2,767
  3,005
  3,255
  3,518
  3,794
  4,085
  4,391
  4,712
  5,050
Net income, $m
  -1,899
  -1,560
  -1,205
  -834
  -446
  -41
  279
  602
  939
  1,291
  2,101
  2,485
  2,887
  3,308
  3,747
  4,208
  4,691
  5,196
  5,727
  6,283
  6,867
  7,480
  8,124
  8,801
  9,512
  10,259
  11,045
  11,871
  12,740
  13,655

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  -4,795
  -5,250
  -5,725
  -6,220
  -6,736
  -7,271
  -7,828
  -8,407
  -9,008
  -9,633
  -10,282
  -10,958
  -11,660
  -12,392
  -13,153
  -13,946
  -14,772
  -15,634
  -16,533
  -17,472
  -18,451
  -19,475
  -20,545
  -21,663
  -22,832
  -24,056
  -25,336
  -26,677
  -28,081
  -29,551
Adjusted assets (=assets-cash), $m
  -4,795
  -5,250
  -5,725
  -6,220
  -6,736
  -7,271
  -7,828
  -8,407
  -9,008
  -9,633
  -10,282
  -10,958
  -11,660
  -12,392
  -13,153
  -13,946
  -14,772
  -15,634
  -16,533
  -17,472
  -18,451
  -19,475
  -20,545
  -21,663
  -22,832
  -24,056
  -25,336
  -26,677
  -28,081
  -29,551
Revenue / Adjusted assets
  -6.277
  -6.277
  -6.278
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
  -6.277
Average production assets, $m
  57,786
  63,276
  69,003
  74,968
  81,176
  87,631
  94,341
  101,314
  108,561
  116,092
  123,920
  132,061
  140,529
  149,341
  158,516
  168,074
  178,035
  188,421
  199,256
  210,565
  222,373
  234,708
  247,599
  261,077
  275,172
  289,918
  305,351
  321,506
  338,422
  356,141
Working capital, $m
  -44,634
  -48,874
  -53,297
  -57,905
  -62,700
  -67,686
  -72,869
  -78,255
  -83,852
  -89,669
  -95,715
  -102,003
  -108,544
  -115,350
  -122,437
  -129,820
  -137,513
  -145,536
  -153,905
  -162,639
  -171,760
  -181,288
  -191,245
  -201,655
  -212,542
  -223,931
  -235,851
  -248,330
  -261,396
  -275,082
Total debt, $m
  2,791
  2,995
  3,209
  3,431
  3,662
  3,903
  4,153
  4,413
  4,683
  4,963
  5,255
  5,558
  5,873
  6,202
  6,544
  6,900
  7,271
  7,658
  8,061
  8,483
  8,923
  9,382
  9,862
  10,365
  10,890
  11,439
  12,014
  12,616
  13,246
  13,906
Total liabilities, $m
  2,153
  2,357
  2,571
  2,793
  3,024
  3,265
  3,515
  3,775
  4,045
  4,325
  4,617
  4,920
  5,235
  5,564
  5,906
  6,262
  6,633
  7,020
  7,423
  7,845
  8,285
  8,744
  9,224
  9,727
  10,252
  10,801
  11,376
  11,978
  12,608
  13,268
Total equity, $m
  -6,948
  -7,608
  -8,296
  -9,013
  -9,760
  -10,536
  -11,343
  -12,181
  -13,052
  -13,958
  -14,899
  -15,878
  -16,896
  -17,955
  -19,059
  -20,208
  -21,405
  -22,654
  -23,957
  -25,316
  -26,736
  -28,219
  -29,769
  -31,389
  -33,084
  -34,857
  -36,712
  -38,655
  -40,689
  -42,819
Total liabilities and equity, $m
  -4,795
  -5,251
  -5,725
  -6,220
  -6,736
  -7,271
  -7,828
  -8,406
  -9,007
  -9,633
  -10,282
  -10,958
  -11,661
  -12,391
  -13,153
  -13,946
  -14,772
  -15,634
  -16,534
  -17,471
  -18,451
  -19,475
  -20,545
  -21,662
  -22,832
  -24,056
  -25,336
  -26,677
  -28,081
  -29,551
Debt-to-equity ratio
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
Adjusted equity ratio
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449
  1.449

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,899
  -1,560
  -1,205
  -834
  -446
  -41
  279
  602
  939
  1,291
  2,101
  2,485
  2,887
  3,308
  3,747
  4,208
  4,691
  5,196
  5,727
  6,283
  6,867
  7,480
  8,124
  8,801
  9,512
  10,259
  11,045
  11,871
  12,740
  13,655
Depreciation, amort., depletion, $m
  6,385
  6,934
  7,506
  8,103
  8,724
  9,369
  10,040
  10,737
  11,462
  12,215
  12,392
  13,206
  14,053
  14,934
  15,852
  16,807
  17,803
  18,842
  19,926
  21,056
  22,237
  23,471
  24,760
  26,108
  27,517
  28,992
  30,535
  32,151
  33,842
  35,614
Funds from operations, $m
  4,486
  5,374
  6,301
  7,269
  8,277
  9,328
  10,319
  11,339
  12,401
  13,506
  14,493
  15,692
  16,940
  18,242
  19,599
  21,015
  22,494
  24,038
  25,652
  27,340
  29,104
  30,951
  32,884
  34,908
  37,029
  39,251
  41,580
  44,022
  46,583
  49,269
Change in working capital, $m
  -4,058
  -4,240
  -4,423
  -4,608
  -4,795
  -4,986
  -5,183
  -5,386
  -5,597
  -5,817
  -6,047
  -6,288
  -6,541
  -6,807
  -7,087
  -7,382
  -7,694
  -8,022
  -8,369
  -8,735
  -9,121
  -9,528
  -9,957
  -10,410
  -10,887
  -11,390
  -11,920
  -12,478
  -13,066
  -13,685
Cash from operations, $m
  8,543
  9,614
  10,724
  11,876
  13,072
  14,314
  15,502
  16,726
  17,998
  19,323
  20,540
  21,979
  23,481
  25,048
  26,686
  28,398
  30,188
  32,061
  34,021
  36,074
  38,225
  40,479
  42,841
  45,318
  47,916
  50,641
  53,500
  56,500
  59,649
  62,954
Maintenance CAPEX, $m
  -5,253
  -5,779
  -6,328
  -6,900
  -7,497
  -8,118
  -8,763
  -9,434
  -10,131
  -10,856
  -11,609
  -12,392
  -13,206
  -14,053
  -14,934
  -15,852
  -16,807
  -17,803
  -18,842
  -19,926
  -21,056
  -22,237
  -23,471
  -24,760
  -26,108
  -27,517
  -28,992
  -30,535
  -32,151
  -33,842
New CAPEX, $m
  -5,253
  -5,490
  -5,726
  -5,965
  -6,208
  -6,455
  -6,710
  -6,973
  -7,246
  -7,531
  -7,829
  -8,140
  -8,468
  -8,812
  -9,175
  -9,558
  -9,961
  -10,386
  -10,835
  -11,309
  -11,808
  -12,335
  -12,891
  -13,477
  -14,095
  -14,746
  -15,432
  -16,155
  -16,917
  -17,718
Cash from investing activities, $m
  -10,506
  -11,269
  -12,054
  -12,865
  -13,705
  -14,573
  -15,473
  -16,407
  -17,377
  -18,387
  -19,438
  -20,532
  -21,674
  -22,865
  -24,109
  -25,410
  -26,768
  -28,189
  -29,677
  -31,235
  -32,864
  -34,572
  -36,362
  -38,237
  -40,203
  -42,263
  -44,424
  -46,690
  -49,068
  -51,560
Free cash flow, $m
  -1,963
  -1,654
  -1,330
  -989
  -632
  -259
  29
  318
  620
  936
  1,102
  1,447
  1,807
  2,183
  2,577
  2,988
  3,420
  3,871
  4,344
  4,840
  5,360
  5,906
  6,479
  7,081
  7,713
  8,377
  9,075
  9,810
  10,582
  11,394
Issuance/(repayment) of debt, $m
  195
  205
  213
  222
  231
  241
  250
  260
  270
  281
  292
  303
  315
  328
  342
  356
  371
  387
  404
  421
  440
  460
  480
  502
  525
  549
  575
  602
  630
  660
Issuance/(repurchase) of shares, $m
  -631
  -660
  -688
  -717
  -746
  -776
  -807
  -838
  -871
  -905
  -941
  -979
  -1,018
  -1,060
  -1,103
  -1,149
  -1,198
  -1,249
  -1,303
  -1,360
  -1,420
  -1,483
  -1,550
  -1,620
  -1,695
  -1,773
  -1,855
  -1,942
  -2,034
  -2,130
Cash from financing (excl. dividends), $m  
  -436
  -455
  -475
  -495
  -515
  -535
  -557
  -578
  -601
  -624
  -649
  -676
  -703
  -732
  -761
  -793
  -827
  -862
  -899
  -939
  -980
  -1,023
  -1,070
  -1,118
  -1,170
  -1,224
  -1,280
  -1,340
  -1,404
  -1,470
Total cash flow (excl. dividends), $m
  -2,399
  -2,110
  -1,805
  -1,484
  -1,147
  -794
  -528
  -260
  19
  311
  453
  771
  1,104
  1,452
  1,815
  2,195
  2,593
  3,009
  3,445
  3,902
  4,380
  4,883
  5,409
  5,963
  6,543
  7,154
  7,795
  8,469
  9,178
  9,924
Retained Cash Flow (-), $m
  -1,268
  -900
  -517
  -117
  300
  735
  807
  838
  871
  905
  941
  979
  1,018
  1,060
  1,103
  1,149
  1,198
  1,249
  1,303
  1,360
  1,420
  1,483
  1,550
  1,620
  1,695
  1,773
  1,855
  1,942
  2,034
  2,130
Prev. year cash balance distribution, $m
  6,317
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  2,650
  -900
  -517
  -117
  300
  735
  807
  838
  890
  1,217
  1,394
  1,750
  2,122
  2,511
  2,919
  3,345
  3,791
  4,258
  4,748
  5,261
  5,800
  6,366
  6,959
  7,583
  8,238
  8,927
  9,650
  10,412
  11,212
  12,054
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  2,541
  -824
  -450
  -96
  233
  534
  545
  524
  511
  638
  662
  747
  807
  843
  857
  850
  825
  784
  731
  669
  600
  528
  456
  386
  320
  260
  207
  161
  122
  91
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

CNH Industrial N.V. is a capital goods company. The Company is engaged in the design, production, marketing, sale and financing of agricultural and construction equipment, trucks, commercial vehicles, buses and specialty vehicles for firefighting, defense and other uses, as well as engines, transmissions and axles for vehicles and engines under marine and power generation applications. Its segments include Agricultural Equipment, which designs, manufactures and distributes farm machinery and implements; Construction Equipment, which designs, manufactures and distributes construction equipment; Commercial Vehicles, which designs, produces and sells a range of light, medium and heavy vehicles for the transportation and distribution of goods; Powertrain, which designs, manufactures and offers a range of propulsion and transmission systems, and axles for on- and off-road applications, and Financial Services, which offers a range of financial services to dealers and customers.

FINANCIAL RATIOS  of  CNH Industrial (CNHI)

Valuation Ratios
P/E Ratio -62.7
Price to Sales 0.6
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 7.5
Price to Free Cash Flow -607.5
Growth Rates
Sales Growth Rate -4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -14.9%
Cap. Spend. - 3 Yr. Gr. Rate -4.4%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 568.8%
Total Debt to Equity 568.8%
Interest Coverage 1
Management Effectiveness
Return On Assets 68.2%
Ret/ On Assets - 3 Yr. Avg. 23.9%
Return On Total Capital -0.8%
Ret/ On T. Cap. - 3 Yr. Avg. 0.7%
Return On Equity -5.5%
Return On Equity - 3 Yr. Avg. 4.7%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 21.4%
Gross Margin - 3 Yr. Avg. 21.5%
EBITDA Margin 8.8%
EBITDA Margin - 3 Yr. Avg. 9.6%
Operating Margin 6.5%
Oper. Margin - 3 Yr. Avg. 8%
Pre-Tax Margin -0%
Pre-Tax Margin - 3 Yr. Avg. 1.8%
Net Profit Margin -1%
Net Profit Margin - 3 Yr. Avg. 0.7%
Effective Tax Rate -3311.1%
Eff/ Tax Rate - 3 Yr. Avg. -1068.2%
Payout Ratio -82.1%

CNHI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CNHI stock intrinsic value calculation we used $27361 million for the last fiscal year's total revenue generated by CNH Industrial. The default revenue input number comes from 2017 income statement of CNH Industrial. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CNHI stock valuation model: a) initial revenue growth rate of 10% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CNHI is calculated based on our internal credit rating of CNH Industrial, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CNH Industrial.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CNHI stock the variable cost ratio is equal to 75.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5122 million in the base year in the intrinsic value calculation for CNHI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 154.4% for CNH Industrial.

Corporate tax rate of 27% is the nominal tax rate for CNH Industrial. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CNHI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CNHI are equal to 192%.

Life of production assets of 10 years is the average useful life of capital assets used in CNH Industrial operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CNHI is equal to -148.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $0 million for CNH Industrial - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1362 million for CNH Industrial is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CNH Industrial at the current share price and the inputted number of shares is $15.8 billion.

RELATED COMPANIES Price Int.Val. Rating
CAT Caterpillar 139.34 412.75  str.buy
CMI Cummins 143.35 301.74  str.buy
PCAR Paccar 67.16 319.16  str.buy
AGCO AGCO 60.01 97.43  str.buy

COMPANY NEWS

▶ Closing of $500 million notes of CNH Industrial Capital LLC   [Aug-14-18 12:15PM  GlobeNewswire]
▶ What Welbilt is looking for in its new CEO   [Aug-13-18 01:13PM  American City Business Journals]
▶ Pricing of CNH Industrial Capital LLC $500 million notes   [Aug-09-18 04:15PM  GlobeNewswire]
▶ Welbilt CEO resigns, takes top job at CNH Industrial   [11:19AM  American City Business Journals]
▶ Machinery Stocks: Is That a Bottom I See?   [Jul-27-18 10:28AM  Barrons.com]
▶ CNH: 2Q Earnings Snapshot   [09:36AM  Associated Press]
▶ CNH Industrial - 2018 Second Quarter Results   [08:30AM  GlobeNewswire]
▶ Will $12 Billion in Farm Aid Rescue Deere?   [Jul-25-18 01:22PM  Barrons.com]
▶ 6 High-Return Stocks From Mario Gabellis Portfolio   [Jul-23-18 01:10PM  Investopedia]
▶ CNH Industrial appoints new Chairman   [01:05PM  GlobeNewswire]
▶ New Strong Sell Stocks for July 16th   [Jul-16-18 09:39AM  Zacks]
▶ CNH Industrial: periodic report on the buy-back program   [Jun-13-18 05:16AM  GlobeNewswire]
▶ CNH: 1Q Earnings Snapshot   [08:43AM  Associated Press]
▶ CNH Industrial NV to Host Earnings Call   [07:15AM  ACCESSWIRE]
▶ CNH Industrial N.V. new buyback program   [01:31AM  GlobeNewswire]
▶ Are CNH Industrial NV.s (NYSE:CNHI) Interest Costs Too High?   [Apr-19-18 11:30AM  Simply Wall St.]
▶ CNH Industrial: periodic report on the buy-back program   [Mar-23-18 06:42AM  GlobeNewswire]
▶ [$$] Dover Picks CEO of CNH as New Leader   [Mar-20-18 11:49AM  The Wall Street Journal]
▶ [$$] Dover Picks CEO of CNH as New Leader   [11:37AM  The Wall Street Journal]
▶ CNH Industrial CEO Richard Tobin steps down   [Mar-19-18 05:39PM  Reuters]
▶ CNH Industrial: periodic report on the buy-back program   [Mar-12-18 06:05AM  GlobeNewswire]
▶ CNH Industrial publishes its 2018 Corporate Calendar   [Jan-31-18 01:30AM  PR Newswire]
▶ CNH Industrial NV to Host Earnings Call   [Jan-30-18 08:15AM  ACCESSWIRE]
▶ CNH reports 4Q loss   [07:40AM  Associated Press]
▶ Longleaf Partners Comments on CNH Industrial   [Jan-22-18 04:13PM  GuruFocus.com]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.