Investing.com -- Goldman Sachs downgraded CNH Industrial (NYSE:CNH) to Neutral from Buy, saying the stock’s strong performance has priced in a recovery in revenue and margins expected in 2026, despite ongoing macro uncertainty and a longer inventory destocking cycle.

Shares of CNH have risen about 35% over the past year, outperforming the broader capital goods sector, even as consensus earnings estimates have been revised lower. 

“We view the current valuation as fair and in line with multis/peers. We therefore see the risk/reward as more balanced from here,” Goldman analysts wrote, trimming their 12-month price target to $11.50 from $12.50.

The bank now expects industrial EBIT in FY26 and FY27 to be 13% and 17% lower, respectively, than previously forecast due to a more prolonged inventory destocking phase through the second half of 2025 and limited pricing power to offset tariff costs.

While Goldman sees signs of recovery in agriculture and construction equipment markets, helped by normalizing inventory, aging U.S. fleets, and European fiscal support, it believes much of that upside is already reflected in the stock. 

It expects agricultural revenue to rise 6% in 2026 and 10% in 2027, with construction up 9% and 18%, respectively.

Despite near-term headwinds, Goldman acknowledged CNH’s competitive position in consolidated ag markets and improving sales momentum.

But it flagged a lack of near-term catalysts, paused strategic initiatives, and a valuation it views as fair relative to peers.

The new price target implies roughly 9% downside and is based on a blend of sum-of-the-parts and sector-relative valuation metrics.

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