CNH Industrial downgraded at Fitch amid ag downturn
CNH working-capital outflows totaled $2B from 2022 to 2024
Fitch Ratings downgraded CNH Industrial to BBB from BBB+ and kept the outlook stable, citing a deeper and longer-than-expected agricultural downturn, soft North American demand and continued tariff and trade uncertainty.
Fitch expects only a gradual recovery beginning in 2026 as pricing and tariff impacts ease, but forecasts that EBITDA leverage will remain elevated relative to the prior rating threshold, according to a Nov. 13 Fitch release. Fitch warned that delayed margin recovery will persist as CNH absorbs most tariff costs amid weak demand, and it also expects leverage to stay high because of lower EBITDA, reduced cash reserves and a revised 3x allowable multiple for the financial services unit, which led to a $900 million equity injection.
CNH’s position in heavy tractors and AG equipment, along with disciplined working-capital management and adequate liquidity, supports the stable outlook, according to the release. Still, weak farm income, low commodity prices and high financing costs weighed on CNH’s 2025 performance, with large-tractor and combine sales in North America falling by double digits.
Working-capital outflows totaled $2 billion from 2022–2024, though CNH is on track to cut inventory by $1 billion in 2025, according to the release. The company’s business profile remains aligned with the BBB category, supported by global diversification and long-term trends in food demand, precision agriculture and infrastructure spending.
Long-term market conditions
Peer comparisons show CNH trailing A-rated manufacturers such as Caterpillar and Deere on margins and scale, according to the release. Fitch projects CNH’s revenue to bottom in 2025 before growing through 2028, while EBIT margins should recover modestly but remain below historical double-digit levels.
CNH ended September with $2.3 billion in cash and $5.8 billion in undrawn credit, including a revolver extended to 2030, according to the release. Outstanding euro- and dollar-denominated bonds are fixed-rate, limiting interest-rate exposure. The company designs, manufactures and finances agricultural and construction equipment.
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