The CNH Industrial stock is, as we will see later, very undervalued both in relation to its competitors and in absolute terms. In fact, it presents very interesting parameters that could lead to interesting increases. However, despite the undervaluation, CNH Industrial is wavering on the stock market.
Even at present, after a rise of around 20% following a reaction from the supports, the stock is called to a new test of strength.
Despite the undervaluation, CNH Industrial is wavering on the stock market
The title CNH Industrial (MIL: CNHI) closed the session on 13 July down by 2.33% compared to the previous session at € 14.10.
Daily time frame: the indications of the graphic analysis
The current projection is bullish, but for some sessions it has been fighting against the strong resistance in the 12.47 euro area (II price target). Exceeding this level could open the door to reaching the maximum bullish extension in the 13.4 euro area (III price target).
If, on the other hand, the resistance were to hold, then retracements could be possible up to the 11.54 euro area. Only below this level could a bearish reversal be triggered with a more likely target in the 10.8 euro area.
The valuation of the CNH Industrial stock
Whatever the variable used, CNH Industrial shares are undervalued. For example, with a price / earnings ratio of 9.7, CNH Industrial is not only among the cheapest on the market, but it is 50% below the average level of the reference sector. Furthermore, the company enjoys interesting valuation levels with a price-to-turnover ratio that is not only relatively low compared to other companies in the sector, but which expresses an undervaluation of over 60% compared to the average value of its competitors. Considering, then, the cash flows generated by the company’s activity, its valuation is weak. Furthermore, the ratio between capitalization and turnover is much lower than 1 confirming an important undervaluation. Finally, the EV / EBITDA ratio is the lowest in the reference sector.
The fair value, calculated with the discounted cash flow method, then, expresses an undervaluation of approximately 20%. The situation is also rosy for the future with an indicator that expresses a potential underestimation of over 50%.
The financial situation is also very good. The liquidity index, in fact, is very large, with a level that is the highest among the securities with a capitalization of more than 1 billion euros.
According to what was reported by specialized magazines, analysts, with an average target price that expresses an undervaluation of 20%, have a positive opinion. At present the average consensus is to buy.
The rally continues on the equity markets