Analyst Note
| Dawit Woldemariam |CNH reported solid earnings to start 2023, thanks to solid ag demand. Ag sales increased to $3.9 billion, up 19% year on year (constant currency). Our near-term demand outlook remains positive, as crop supplies are still near cycle lows. The current environment (high crop prices) incentivizes farmers to plant more crops. We expect 2023 to be another strong year for CNH, leading us to forecast over 9% sales growth compared with 2022. All in all, our $16.10 fair value estimate is unchanged, following first-quarter earnings. The company currently trades 13% below our fair value estimate. We’d like to see a greater margin of safety before getting excited about the valuation.