That depends on different things:
1) Is Germany willing to make a peace deal? With Hitler, they will accept only an unconditional surrender of Great Britain and the US - since this is totally ASB, the first condition is to remove Adolf.
2) Are the Allies willing to make a peace deal? Neither, since they knwo that with their industrial power (Soviet Union + USA + Great Britain), they overproduce Germany and will, even with some defeats, ultimately win against Nazi Germany.
But, and this is the important
but, 1942 is not 1943, and 1943 is not 1944. The Soviet Union is in 1942 fighting not to get German unconditional surrender - they are fighting for their lives. And this is the point which a rational German leadership (something like Göring + Manstein and Rommel) can use to get peace in the east. Stalin would accept nearly everything just to stay in power and to save USSR. A new Brest-Litowsk with a German Ukraine, German Belarus, Finnish Karelia, Romanian Bessarabia and Japanese Wladiwostok is in the cards.
3) What are the WAllies going to do after that? After the peace in the east, granting Germany nearly unlimited ressources (no Russian oil, but enough grain and man power), Germany can fight on for... a long, long time. Even if they disband roughly half of their troups to get the soldiers to work again, they can still throw 2,5 millions soldiers in the west to guard the Atlantikwall.
Also, they can use the Luftwaffe, previously tied up in the east, to protect German and European cities in general, and can develop new technologies like the V2 or surface-to-air missiles.
How are the WAllies going to break this resistance? Sure, Germany can hardly win the war in North Africa (but it can become a hard challenge for the WAllies to fight against a well supplied German and Italian army in North Africa, taking into account what the Germans achieved even with the limited ressources they had there OTL). But a succesful landing against a rational German leadership without allied air dominance

.
The best issue is that the Americans elect a peace candidate in 1944 who existis the war and forces Churchill to accept a white peace.