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Agco (AGCO)
NYSE:AGCO
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Agco
(NYSE:AGCO)53Neutral
Positive Factors
Market Demand
High early interest in the Symphony spraying system with 2025 basically sold out indicates strong market demand.
Strategic Positioning
AGCO is best positioned to take advantage of the opportunity in the next upcycle, particularly in machine retrofitting.
Technology and Innovation
Fendt, Precision ag and parts investments should pay in the form of higher-margin revenue across the cycle.
Negative Factors
Forecast and Earnings
AGCO is guiding to a very weak and well-below-consensus Q1 forecast with break-even EPS.
Sales and Margins
Q1 net sales are expected to be down 26% year-over-year, with sales sharply down in the Americas.
Agco (AGCO) vs. S&P 500 (SPY)
Market Cap
$6.83B
Dividend Yield1.27%
Average Volume (3M)832.70K
Price to Earnings (P/E)46.4
Beta (1Y)1.03
Revenue Growth-19.08%
EPS Growth-136.41%
CountryUS
Employees27,900
SectorIndustrials
Sector Strength66
IndustryIndustrial Machinery
Share Statistics
EPS (TTM)-5.70
Shares Outstanding74,582,016
10 Day Avg. Volume853,599
30 Day Avg. Volume832,697
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.59
Price to Cash Flow (P/CF)2.10
P/FCF Ratio2.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$103.00Price Target Upside0.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Agco Business Overview & Revenue Model
Company DescriptionAGCO Corporation is a global leader in the design, manufacture, and distribution of agricultural equipment. The company operates in sectors such as tractors, combines, hay tools, sprayers, forage equipment, and implements, serving farmers worldwide. Founded in 1990 and headquartered in Duluth, Georgia, AGCO offers a comprehensive range of products under well-known brands like Challenger, Fendt, GSI, Massey Ferguson, and Valtra, aimed at enhancing farm productivity and efficiency.
How the Company Makes MoneyAGCO makes money primarily through the sale of its agricultural equipment and related parts. The company's revenue streams are driven by the sales of high-performance machinery such as tractors and combines, which are essential for modern farming operations. AGCO also generates substantial income from aftermarket parts and service solutions, providing ongoing support and maintenance to its equipment users. Additionally, the company benefits from strategic partnerships and joint ventures that enhance its market reach and product offerings. AGCO's focus on innovation and technology solutions, including precision agriculture, further contributes to its revenue by offering advanced farming solutions that improve yield and operational efficiency for farmers.
Agco Financial Statement Overview
Summary
AGCO's financial performance presents mixed signals. The income statement shows a notable decline in revenue and profitability, with a negative EBIT and net income. The balance sheet remains stable, albeit with increased liabilities. Cash flow analysis indicates potential liquidity challenges due to decreased free cash flow and lower operating cash flow.Income Statement
The income statement shows recent challenges, with a notable decrease in revenue in 2024 compared to 2023. The gross profit margin declined, and the company reported a negative EBIT and net income, indicating operational difficulties. While historical data reflects some growth, the latest results highlight significant profitability concerns.45
Neutral
Balance Sheet
AGCO's balance sheet is stable with a moderate debt-to-equity ratio, although it increased slightly in the latest year. The equity ratio remains healthy, suggesting a robust capital structure. However, the reduction in stockholders' equity and increased liabilities could present future leverage risks.60
Neutral
Cash Flow
Cash flow analysis shows a decrease in free cash flow in the latest period, driven by lower operating cash flow. The free cash flow to net income ratio reflects some pressure on cash conversion. Despite previous growth in cash flow, current figures indicate potential liquidity challenges.55
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 11.51B | 11.66B | 14.41B | 12.65B | 11.14B | 9.15B | Gross Profit |
| 2.63B | 2.90B | 3.78B | 3.00B | 2.57B | 2.06B | EBIT |
| 983.40M | -122.10M | 1.70B | 1.27B | 1.00B | 599.70M | EBITDA |
| 1.30B | 57.90M | 1.69B | 1.57B | 1.30B | 904.10M | Net Income Common Stockholders |
| 792.90M | -424.80M | 1.17B | 889.60M | 897.00M | 427.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 612.70M | 612.70M | 595.50M | 789.50M | 889.10M | 1.12B | Total Assets |
| 11.19B | 11.19B | 11.42B | 10.10B | 9.18B | 8.50B | Total Debt |
| 127.50M | 127.50M | 1.53B | 1.59B | 1.62B | 1.74B | Net Debt |
| -485.20M | -485.20M | 937.00M | 796.70M | 730.50M | 623.20M | Total Liabilities |
| 7.15B | 7.15B | 6.76B | 6.22B | 5.74B | 5.49B | Stockholders Equity |
| 3.74B | 3.74B | 4.66B | 3.88B | 3.42B | 2.98B |
| Cash Flow | Free Cash Flow | ||||
| -46.80M | 296.60M | 585.00M | 449.90M | 413.10M | 626.60M | Operating Cash Flow |
| 241.60M | 689.90M | 1.10B | 838.20M | 682.90M | 896.50M | Investing Cash Flow |
| -444.80M | -1.65B | -545.70M | -496.80M | -311.10M | -241.70M | Financing Cash Flow |
| 368.30M | 1.05B | -671.70M | -407.00M | -539.50M | 22.70M |
Agco Technical Analysis
Positive
102.70
Price Trends
97.69
Positive
97.22
Positive
96.43
Positive
Market Momentum
-0.88
Negative
57.71
Neutral
73.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AGCO, the sentiment is Positive. The current price of 102.7 is above the 20-day moving average (MA) of 97.16, above the 50-day MA of 97.69, and above the 200-day MA of 96.43, indicating a bullish trend. The MACD of -0.88 indicates Negative momentum. The RSI at 57.71 is Neutral, neither overbought nor oversold. The STOCH value of 73.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AGCO.
Agco Risk Analysis
Agco disclosed 29 risk factors in its most recent earnings report. Agco reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Agco Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.59B | 7.88 | 19.13% | 1.68% | -0.47% | -34.74% | |
74 Outperform | $124.41B | 20.32 | 27.91% | 1.29% | -20.93% | -34.33% | |
70 Outperform | $1.41B | 20.85 | 14.32% | 1.10% | -7.17% | -0.53% | |
66 Neutral | $161.78B | 15.35 | 55.36% | 1.62% | -3.36% | 9.59% | |
64 Neutral | $1.13B | 7.16 | 11.93% | 3.20% | 7.47% | 10.22% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
53 Neutral | $6.83B | 46.40 | -10.11% | 1.27% | -19.08% | -136.41% |
* Industrials Sector Average
Performance Comparison
AGCO
Agco
102.70
-8.07
-7.29%
AGRO
Adecoagro SA
10.85
0.98
9.93%
CAT
Caterpillar
350.30
20.30
6.15%
DE
Deere
499.62
130.14
35.22%
LNN
Lindsay
132.01
17.29
15.07%
TEX
Terex
40.97
-16.70
-28.96%
Agco Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -0.28% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
AGCO demonstrated strong operational resilience with solid margins despite a significant sales decline. Strategic moves, including the PTx Trimble joint venture, position the company for future growth in precision agriculture. However, challenges such as high dealer inventories, a goodwill impairment charge, and production cuts due to weak demand highlight ongoing difficulties in the current market environment.Highlights
Strong Adjusted Operating Margin
AGCO reported a strong 9.9% adjusted operating margin for Q4 2024 and an 8.9% adjusted operating margin for the full year, indicating resilience during an industry downturn.
PTx Trimble Joint Venture
AGCO closed the largest ag-tech deal in its industry's history with the PTx Trimble joint venture, enhancing strategic ambitions and focusing on agriculture machinery and precision ag technology.
Precision Ag Growth
Precision Ag sales are targeted to reach $2 billion by 2029, with significant progress in 2024, including over 1,000 PTx dealers.
Parts Business Growth
AGCO's parts sales were approximately $418 million for Q4, up 4% on a reported basis and 6% year-over-year when excluding currency effects.
Lowlights
Significant Sales Decline
Sales were down 24% in Q4 2024 compared to Q4 2023 and down 19% for the full year from 2023.
High Dealer Inventories
Dealer inventories remain higher than target with 1-1.5 months of excess inventory, requiring significant production cuts in 2025.
Goodwill Impairment Charge
An impairment charge of over $350 million was recorded in Q4 2024 related to the PTx Trimble joint venture due to lower projected cash flows.
Production Cuts Due to Weak Demand
Production hours were down approximately 33% in Q4 2024 versus Q4 2023 and are projected to be down 15-20% in 2025.
Company Guidance
During the AGCO Fourth Quarter 2024 Earnings Call, the company provided detailed guidance on various financial metrics and strategic initiatives. For 2024, AGCO achieved a 9.9% adjusted operating margin and $1.97 in adjusted earnings per share for the fourth quarter, with annual figures reaching an 8.9% adjusted operating margin and $7.50 in adjusted earnings per share, despite a decline in sales of 19% compared to 2023. AGCO anticipates continuing production cuts to manage excess dealer inventory, projecting a 15% to 20% reduction in production hours for 2025. The company expects 2025 net sales to be $9.6 billion, with adjusted operating margins between 7% and 7.5%, and earnings per share ranging from $4 to $4.50. Furthermore, AGCO plans to grow its Precision Ag sales to $2 billion by 2029, focusing on its strategic initiatives, including the integration of PTx Trimble and expansion of its Precision Technology offerings. Despite challenges such as a significant downturn in the North American market and increased dealer inventories, AGCO remains committed to its long-term strategic goals and structural improvements aimed at enhancing resilience and profitability.Agco Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
AGCO Appoints Zhanna Golodryga to Board of Directors
Positive
Feb 12, 2025
On February 12, 2025, AGCO Corporation announced the appointment of Zhanna Golodryga to its Board of Directors, effective April 1, 2025. Golodryga is an Executive Vice President at Phillips 66, with significant experience in digital transformation and sustainability. Her expertise is expected to enhance AGCO’s strategic priorities in smart farming solutions and technology offerings. This move reflects AGCO’s commitment to advancing its innovation and sustainability goals, potentially impacting its market positioning and operations positively.
Business Operations and StrategyFinancial Disclosures
AGCO Unveils ‘Farmer-First’ Strategy to Boost Growth
Positive
Dec 19, 2024
AGCO Corporation announced ambitious long-term financial targets at its 2024 Analyst Meeting, aiming to enhance profitability and market positioning through its ‘Farmer-First’ strategy. The company plans to improve operating margins, outgrow the industry, and expand its product lines, particularly focusing on its Fendt and precision ag offerings. AGCO also detailed its 2025 outlook, anticipating net sales of $9.6 billion and an adjusted operating margin of 7.0%-7.5%, reflecting challenges in demand and inventory destocking. The company is leveraging its innovative precision agriculture solutions to increase productivity and market share, emphasizing the growth of its PTx portfolio and the rollout of new technologies to support mixed fleet farming.
Executive/Board ChangesM&A Transactions
AGCO Announces Retirement of Senior VP Bob Crain
Neutral
Dec 11, 2024
AGCO Corporation announced the retirement of Bob Crain, Senior Vice President and General Manager of Grain & Protein, effective December 31, 2024. Crain, who has been with AGCO since 2006, played a crucial role in various strategic initiatives, including leading profit and loss management across the Americas and overseeing the launch of the global Customer Experience business. His tenure also included a significant strategic review resulting in the divestiture of a majority of the Grain & Protein business to American Industrial Partners in November, reflecting his impactful leadership within the company and the agricultural industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.