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Agco (AGCO)
NYSE:AGCO

Agco (AGCO) AI Stock Analysis

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AG

Agco

(NYSE:AGCO)

Rating:52Neutral
Price Target:
$112.00
▲(3.17%Upside)
AGCO's overall stock score reflects moderate financial performance, with significant challenges in profitability and declining sales. Despite technical indicators showing positive momentum, the negative valuation due to unprofitability weighs heavily. The earnings call suggests strategic focus and some areas of growth, particularly in cash flow and specific markets like Brazil, but significant risks remain.
Positive Factors
Market Recovery
AGCO is well-positioned to benefit from a likely recovery in Europe and South America, which is expected to gain momentum.
Share Repurchases
The announcement that TAFE CEO Mallika Srinivasan will not seek re-election to AGCO's Board of Directors suggests a likely settlement allowing share repurchases.
Trade Deals
The possibility of a US-EU trade deal and/or AGCO resolution with TAFE are potential upside catalysts for AGCO shares.
Negative Factors
Earnings Forecast
AGCO is guiding to a very weak and well-below-consensus Q1 forecast with break-even EPS.
Inventory Levels
AGCO is still dealing with above-target inventory levels, particularly in North and South America.
Market Contraction
The contraction in the market is expected to take longer to play out, making targets challenging to achieve.

Agco (AGCO) vs. SPDR S&P 500 ETF (SPY)

Agco Business Overview & Revenue Model

Company DescriptionAGCO Corporation (NYSE: AGCO) is a global leader in the design, manufacture, and distribution of agricultural equipment and solutions. Founded in 1990, AGCO offers a comprehensive range of machinery, including tractors, combines, hay tools, sprayers, and forage equipment, under well-known brands such as Challenger, Fendt, GSI, Massey Ferguson, and Valtra. The company serves a diverse customer base across the Americas, Europe, and Asia-Pacific, aiming to enhance productivity and sustainability in farming practices through innovative technology and customer-focused solutions.
How the Company Makes MoneyAGCO generates revenue primarily through the sale of its agricultural equipment and related replacement parts. The company's revenue streams are categorized into the following segments: tractors, combines, hay and forage equipment, implements, grain storage and protein production systems, and precision agriculture technology solutions. AGCO also benefits from its extensive dealer network and after-sales services, which enhance customer loyalty and retention. Additionally, strategic partnerships and collaborations with technology providers and other industry stakeholders play a crucial role in expanding AGCO's market reach and technological capabilities, contributing to its overall revenue growth.

Agco Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 28.32%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed outlook for AGCO, with significant challenges in sales and operating margins due to soft demand and market conditions in key regions such as North America and Europe. However, the company showed strong cash flow improvements, positive momentum in Brazil, and received recognition for innovation, indicating potential areas for future growth and recovery.
Q1-2025 Updates
Positive Updates
Strong Cash Flow Improvement
AGCO reported a significant improvement in cash usage, with a reduction of $205 million or 44% less than the first quarter of 2024, primarily related to improved working capital and lower capital expenditures.
Positive Momentum in Brazil
Brazil industry retail sales increased by 11% during the first three months of 2025 compared to the first three months of 2024, with optimism around healthy soybean yields and the expectation for farmers to expand global share in key commodities.
Recognition for Innovation
AGCO's products, including the PTx Trimble OutRun retrofit autonomy kit and the Valtra S Series, won prestigious awards, showcasing the company's focus on innovation and helping farmers improve profitability.
Negative Updates
Significant Decline in Net Sales
AGCO achieved over $2 billion in net sales, down approximately 30% compared to quarter one, 2024, due to soft demand in the Ag market and efforts to de-stock dealer inventories.
Decreased Operating Margins
Consolidated operating margins were 2.4% on a reported basis and 4.1% on an adjusted basis, reflecting decremental margins in the low to mid-20% range due to reduced sales volume and factory underabsorption.
Challenging Market Conditions in North America and Europe
North America industry retail sales decreased 14%, and Western Europe industry retail tractor sales decreased 17% during the first three months of 2025 compared to the same period in 2024.
Company Guidance
During the AGCO First Quarter 2025 Earnings Call, various financial metrics and strategic guidance were discussed. The company reported over $2 billion in net sales, a 30% decrease compared to Q1 2024, largely due to reduced demand, dealer inventory de-stocking, and the divestiture of the Grain & Protein business. Excluding Grain & Protein, sales declined by about 25%. Consolidated operating margins were 2.4% on a reported basis and 4.1% on an adjusted basis. Production hours were reduced by 33% from Q1 2024, aligning with the strategy to right-size dealer inventories. The company remains focused on its three high-margin growth levers: expanding the Fendt brand, growing Precision Ag sales to $2 billion globally, and increasing parts business sales to $2.3 billion. AGCO anticipates 2025 production hours to be 15% to 20% lower than 2024 and maintains a full-year net sales outlook of $9.6 billion, with earnings per share expected between $4 and $4.50. The company is also monitoring tariff impacts and implementing mitigation strategies where feasible.

Agco Financial Statement Overview

Summary
AGCO's financial performance is mixed. The income statement shows declining revenue and net losses, impacting profitability. The balance sheet is stable with low leverage but negative returns. Cash flow is moderately strong, yet underlying profitability issues persist.
Income Statement
45
Neutral
The income statement shows declining revenue and profitability. Gross Profit Margin is 24.3% for TTM, indicating a reasonable cost structure. However, the Net Profit Margin is negative due to significant net losses in recent periods. Revenue has decreased from 2023 to TTM, impacting growth metrics negatively.
Balance Sheet
60
Neutral
The balance sheet reflects moderate financial stability. The Debt-to-Equity Ratio for TTM is low at 0.04, suggesting manageable leverage. However, the Return on Equity is negative due to net losses, which affects profitability metrics. The Equity Ratio is 33.2%, showing a sound capital structure.
Cash Flow
55
Neutral
Cash flow analysis indicates moderate results. Free Cash Flow has grown compared to prior periods, but Operating Cash Flow to Net Income is high due to negative net income, hinting at potential underlying operational challenges. Free Cash Flow to Net Income is favorable, reflecting efficient cash generation relative to earnings.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue10.78B11.66B14.41B12.65B11.14B9.15B
Gross Profit2.62B2.90B3.78B3.00B2.57B2.06B
EBITDA-259.10M58.60M1.69B1.57B1.30B904.10M
Net Income-582.30M-424.80M1.17B889.60M897.00M427.10M
Balance Sheet
Total Assets11.48B11.19B11.42B10.10B9.18B8.50B
Cash, Cash Equivalents and Short-Term Investments562.60M612.70M595.50M789.50M889.10M1.12B
Total Debt3.07B2.78B1.53B1.59B1.62B1.74B
Total Liabilities7.37B7.15B6.76B6.22B5.74B5.49B
Stockholders Equity3.81B3.74B4.66B3.88B3.42B2.98B
Cash Flow
Free Cash Flow501.20M296.60M585.00M449.90M413.10M626.60M
Operating Cash Flow847.70M689.90M1.10B838.20M682.90M896.50M
Investing Cash Flow-1.61B-1.65B-545.70M-496.80M-311.10M-241.70M
Financing Cash Flow-1.09B1.05B-671.70M-407.00M-539.50M22.70M

Agco Technical Analysis

Technical Analysis Sentiment
Positive
Last Price108.56
Price Trends
50DMA
100.21
Positive
100DMA
96.03
Positive
200DMA
96.37
Positive
Market Momentum
MACD
2.27
Negative
RSI
63.95
Neutral
STOCH
86.93
Negative
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 108.56 is above the 20-day moving average (MA) of 103.43, above the 50-day MA of 100.21, and above the 200-day MA of 96.37, indicating a bullish trend. The MACD of 2.27 indicates Negative momentum. The RSI at 63.95 is Neutral, neither overbought nor oversold. The STOCH value of 86.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AGCO.

Agco Risk Analysis

Agco disclosed 28 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 (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
OSOSK
77
Outperform
$8.02B13.3015.24%1.64%5.95%-10.59%
OSOSK
77
Outperform
$8.02B13.3015.24%1.64%5.95%-10.59%
CACAT
70
Outperform
$184.13B19.0855.67%1.42%-5.58%-7.37%
CACAT
70
Outperform
$184.13B19.0855.67%1.42%-5.58%-7.37%
67
Neutral
€8.08B19.966.46%2.73%1.89%-38.57%
DEDE
64
Neutral
$141.09B25.2024.07%1.24%-22.26%-37.83%
DEDE
64
Neutral
$141.09B25.2024.07%1.24%-22.26%-37.83%
TETEX
62
Neutral
$3.22B13.3813.85%1.36%-2.78%-51.72%
TETEX
62
Neutral
$3.22B13.3813.85%1.36%-2.78%-51.72%
CNCNH
61
Neutral
$16.83B16.2113.26%1.83%-21.99%-52.11%
CNCNH
61
Neutral
$16.83B16.2113.26%1.83%-21.99%-52.11%
52
Neutral
$8.10B46.40-13.60%1.06%-23.02%-152.78%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AGCO
Agco
108.56
16.15
17.48%
CAT
Caterpillar
391.51
70.66
22.02%
CAT
Caterpillar
391.51
70.66
22.02%
CNH
CNH Industrial
13.47
4.17
44.84%
CNH
CNH Industrial
13.47
4.17
44.84%
DE
Deere
510.29
166.30
48.34%
DE
Deere
510.29
166.30
48.34%
OSK
Oshkosh
124.54
24.10
23.99%
OSK
Oshkosh
124.54
24.10
23.99%
TEX
Terex
49.07
-1.89
-3.71%

Agco Corporate Events

Legal ProceedingsStock BuybackBusiness Operations and Strategy
AGCO and TAFE Resolve Disputes with New Agreements
Neutral
Jul 1, 2025

On June 30, 2025, AGCO Corporation and TAFE entered into multiple agreements to resolve ongoing disputes and redefine their partnership. These agreements include a settlement of legal claims, a transfer of the Massey Ferguson brand rights in India, Nepal, and Bhutan to TAFE, a buyback of AGCO’s shares in TAFE for $260 million, and a cooperation agreement that sets limitations on TAFE’s future actions regarding AGCO’s shares. These strategic moves are expected to streamline AGCO’s operations and potentially impact its market positioning in the agricultural machinery sector.

The most recent analyst rating on (AGCO) stock is a Hold with a $96.00 price target. To see the full list of analyst forecasts on Agco stock, see the AGCO Stock Forecast page.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
AGCO Completes Sale of Grain & Protein Business
Neutral
Apr 25, 2025

On November 1, 2024, AGCO Corporation and its subsidiary Massey Ferguson Corp. completed the sale of the majority of its Grain & Protein business to A-AG Holdco Limited, an affiliate of American Industrial Partners. This divestiture involved brands like GSI, Automated Production, Cumberland, Cimbria, and Tecno. The financial results of the divested business were recast to maintain comparability across AGCO’s segments, impacting the company’s financial statements for 2024 and 2023. This strategic move is likely to influence AGCO’s operational focus and financial reporting, potentially affecting stakeholders and the company’s market positioning.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 02, 2025