Agco: Trying to Catch Up Through Precision Agriculture

We are relaunching coverage of Agco with a $140 fair value estimate for the world’s third-largest manufacturer of agricultural equipment. While it is pursuing a strategy similar to its peers (precision agriculture technology, extensive dealer network, bundled finance offering), we believe Agco lacks an economic moat due to its weaker market position versus its peers. We assign a Standard Capital Allocation Rating as the company generally emulates its peer group and is taking prudent action to create shareholder value.