CNH Industrial Closes K-Line Ag Buyout, Boosts Portfolio

CNH Industrial N.V. CNHI has announced the completion of the acquisition of K Line Ag, the Australian manufacturer of agricultural implements. The acquisition, closed on Dec 2, will incorporate key tillage and residue-management equipment, which is essential for ensuring maximum seedbed preparation and is a fundamental for productive yields.

Additionally, it will enhance the crop-production portfolios of Case IH and New Holland Agriculture, the company’s global brands of agricultural equipment.

CNH Industrial’s Agricultural segment’s growth strategy focuses on placing technological advancements at the service of its brands’ global customer base and developing an advanced digital-farming offering. Thus, the integration of leading-edge tillage and residue-management equipment is an essential.

K-Line has become the largest tillage manufacturer in Australia by designing robust and reliable products for some of the world’s harshest soil conditions. Per CNH Industrial, the K-Line Ag acquisition is a concrete expression of the Agricultural segment’s objective to seek both strategic acquisitions, in order to enhance the company’s agricultural offerings, as well as its role as an industry consolidator.

In the past three months, CNH Industrial’s stock has depreciated 2.5% compared with the industry’s 7% growth.

For the current year, CNH Industrial projects industrial activities’ net sales at $26.5-$27 billion. The adjusted earnings per share guidance is at 84-88 cents. Net debt of industrial activities at the end of the ongoing year is expected between $400 million and $600 million.

Zacks Rank and Stocks to Consider

Currently, CNH Industrial carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector are BRP Inc. DOOO, Spartan Motors, Inc. SPAR and SPX Corporation SPXC. While BRP and Spartan Motors flaunt a Zacks Rank #1 (Strong Buy), SPX carries a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

BRP has a projected earnings growth rate of 19.75% for the current year. Its shares have gained 69.2% over the past year.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 140.4% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The stock has appreciated 84.2% in the past year.

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