CNH Industrial (CNH) Expected to Beat Earnings Estimates: Should You Buy?

CNH Industrial (CNH) is scheduled to report Q2 2025 results on August 1, with consensus estimates projecting a significant year-over-year decline in earnings to $0.16 per share (-57.9%) and revenues to $4.53 billion (-17.6%). Despite this challenging outlook, Zacks' proprietary Earnings ESP model, combined with a Zacks Rank #3, suggests CNH is likely to surpass its consensus EPS estimate, offering a potential catalyst for near-term stock movement, though investors should note the company has beaten estimates only once in the last four quarters.

Analysis

CNH Industrial is approaching its June 2025 quarterly report with consensus estimates pointing to a significant contraction, including a 17.6% year-over-year revenue decline to $4.53 billion and a 57.9% drop in earnings per share to $0.16. This outlook reflects broad weakness in the manufacturing and farm equipment sector, as evidenced by similar projected declines for competitor Agco. Despite this challenging backdrop and a 3.31% downward revision to the consensus EPS estimate over the last 30 days, a key predictive model suggests a potential positive catalyst. The company holds a positive Zacks Earnings ESP of +1.59%, which, when combined with its Zacks Rank #3 (Hold), indicates a high probability of beating the current low-bar earnings estimate. However, this optimistic signal is tempered by CNH's historical performance, having surpassed consensus EPS estimates only once in the last four quarters. The ultimate stock reaction will likely depend more on management's forward-looking commentary than on beating these depressed quarterly figures.

Key Decisions for Investors

• Consider a tactical long position ahead of the August 1st earnings release to capitalize on the high probability of an EPS beat, as signaled by the positive +1.59% Earnings ESP.
• Investors should prioritize analysis of management's forward guidance on the earnings call, as a simple beat on severely depressed estimates is insufficient to confirm a fundamental turnaround given the -17.6% expected revenue decline.
• Weigh the potential for a short-term price increase against the underlying weak fundamentals and the company's poor track record of beating estimates in only one of the last four quarters before building a significant position.
• Note CNH's more favorable earnings surprise potential compared to its peer AGCO, which carries a negative ESP, when allocating capital within the farm equipment sector.