Goldman Sachs Raises PT On CNH To $42

Goldman Sachs, in light of CNH Global (NYSE: CNH)'s 1Q earnings, is raising its price target from $40 to $42 and is maintaining its Sell rating.

In the report, Goldman Sachs writes, “We maintain our sector-relative Sell rating on CNH as we believe (1) North America ag equipment demand (around 45% of CNH profits) will lag growth in other industrial markets over the balance of the economic cycle given tight equipment trade-in cycles and limited acreage growth, (2) Construction Equipment operating leverage will be limited by new emissions product cycles through 2014, and (3) CNH's valuation premium vs Deere and Agco is unsustainable due to CNH's lower cash returns and nearly a third of earnings from the low multiple captive finance business.”

CNH closed at $47.80 last Thursday.