Company Reports

Agco was founded in 1990 and built up through a series of acquisitions. It has expanded into precision agriculture via further acquisitions: primarily Precision Planting in 2017 and a joint venture with the agriculture assets of Trimble, in which Agco bought a controlling interest in 2024. Those assets have been rebranded as PTx, which has approximately 1,000 points of distribution in North America. The company is actively adding PTx distribution. The company’s sales and profits are over-indexed to Europe, though management is trying to grow in larger, more lucrative North and South American markets.

Agco reported a weak second quarter with revenue down 1% to $2.6 billion and EPS increased modestly ($0.08) to $1.43. The company downgraded its guidance to sales of $10.1 billion-$10.2 billion and EPS of $5.50-5.75.

Agco was founded in 1990 and built up through a series of acquisitions. It has expanded into precision agriculture via further acquisitions: primarily Precision Planting in 2017 and a joint venture with the agriculture assets of Trimble, in which Agco bought a controlling interest in 2024. Those assets have been rebranded as PTx, which has approximately 1,000 points of distribution in North America. The company is actively adding PTx distribution. The company’s sales and profits are over-indexed to Europe, though management is trying to grow in larger, more lucrative North and South American markets.

Agco reported 4.7% revenue growth to $2.3 billion, excluding nearly 10% of favorable foreign exchange impacts. Ongoing strength in Europe, combined with cost controls and share repurchases, allowed the company to raise its 2026 EPS guidance to $6.00 from $5.50-$6.00.

Agco was founded in 1990 and built up through a series of acquisitions. It has expanded into precision agriculture via further acquisitions: primarily Precision Planting in 2017 and a joint venture with the agriculture assets of Trimble, in which Agco bought a controlling interest in 2024. Those assets have been rebranded as PTx, which has approximately 1,000 points of distribution in North America. The company is actively adding PTx distribution. The company’s sales and profits are over-indexed to Europe, though management is trying to grow in larger, more lucrative North and South American markets.

Agco was founded in 1990 and built up through a series of acquisitions. It has expanded into precision agriculture via further acquisitions: primarily Precision Planting in 2017 and a joint venture with the agriculture assets of Trimble, in which Agco bought a controlling interest in 2024. Those assets have been rebranded as PTx, which has approximately 1,000 points of distribution in North America. The company is actively adding PTx distribution. The company’s sales and profits are over-indexed to Europe, though management is trying to grow in larger, more lucrative North and South American markets.

Agco reported 2025 revenue of $10.1 billion (down 13.5% year over year) and adjusted operating margin of 7.7%, which, while down 120 basis points year over year, represents the company’s best performance at a cyclical trough in its history.

Agco reported third-quarter results and continues to be supported by its outsize exposure to Europe, where sales grew 20% on a constant-currency basis and operating margin expanded to 15.6%. Large declines (30%) in North America continued, but management expressed conviction around the trough.

While Agco’s second-quarter sales fell 19% due to ongoing weakness in global agriculture markets, the company has a favorable product mix and is doing an admirable job of containing costs. 2025 revenue guidance increased by 2% and EPS rose nearly 15% from midpoint to midpoint.

Agco was founded in 1990 and built up through a series of acquisitions. It has expanded into precision agriculture via further acquisitions: primarily Precision Planting in 2017 and a joint venture with the agriculture assets of Trimble, in which Agco bought a controlling interest in 2024. Those assets have been rebranded as PTx, which has approximately 1,000 points of distribution in North America. Agco divested its grain and protein assets (grain handling systems and livestock management solutions) in 2024 to focus on agricultural machinery and technology. The company’s sales and profits are heavily overindexed to Europe, though management is trying to grow in the larger and more lucrative North and South American markets.

Agco reported first-quarter sales of $2.1 billion, adjusted EBIT of $83 million (4.1% margin), and adjusted EPS of $0.41, reflecting ongoing difficulties in global agriculture markets. However, aggressive cost-cutting measures and stronger performance in its core European market allowed for modest profitability when the company had expected to break even. This outperformance, combined with lower anticipated foreign currency impact, is of sufficient magnitude to offset the company’s anticipated headwinds from tariffs. As a result, the company maintained its 2025 guidance for approximately $9.6 billion in sales and adjusted EPS from $4.00-$4.50 per share. We are maintaining our outlook for 2025 and fair value estimate of $140.

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.

Agco was founded in 1990 and built up through a series of acquisitions. It has expanded into precision agriculture via further acquisitions: primarily Precision Planting in 2017 and a joint venture with the agriculture assets of Trimble, in which Agco bought a controlling interest in 2024. Those assets have been rebranded as PTx, which has approximately 1,000 points of distribution in North America. Agco divested its grain and protein assets (grain handling systems and livestock management solutions) in 2024 to focus on agricultural machinery and technology. The company’s sales and profits are heavily overindexed to Europe, though management is trying to grow in the larger and more lucrative North and South American markets.

We will discontinue analyst coverage of Agco on or around July 8. We provide analyst research and ratings on over 1,500 companies globally and periodically adjust our coverage according to investor interest and staffing.

Agco is a pure-play agricultural equipment company that has traditionally been focused on tractors. We believe it will continue to be a top-three player in the ag industry. The company has been successful in emerging markets, where customers typically look for reasonably priced equipment. In developed markets, it faces competition from industry leaders Deere and CNH, which provide customers high-quality and strong-performing products, making it difficult for Agco to gain ground. The company’s peers help customers reduce the total cost of ownership through improved fuel efficiency, limited machine downtime, and consistent parts availability.

Agco reported first-quarter earnings slightly below our expectations. Our fair value estimate decreased 1% to $139, down from $141. The decline was largely due to slight tweaks in our near-term sales and margin expectations. For 2024, we’re forecasting sales to decline by 6% year on year (including Trimble). On profitability, we expect adjusted operating margins to decline by 60 basis points to 11.3%.

Agco is a pure-play agricultural equipment company that has traditionally been focused on tractors. We believe it will continue to be a top-three player in the ag industry. The company has been successful in emerging markets, where customers typically look for reasonably priced equipment. In developed markets, it faces competition from industry leaders Deere and CNH, which provide customers high-quality and strong-performing products, making it difficult for Agco to gain ground. The company’s peers help customers reduce the total cost of ownership through improved fuel efficiency, limited machine downtime, and consistent parts availability.

Agco reported mixed fourth-quarter earnings, as demand continues to slow. We reduced our fair value estimate by 3% to $141 per share (down from $145 previously). Reported figures in the fourth quarter came in below our expectations. Sales declined by 2.5% year on year, while operating margins contracted 160 basis points to 10.3%. South America was the most challenged region, where sales declined nearly 39% year on year. Operating margins came in at nearly 4% versus 20% in the year-ago period. Lower commodity prices have put pressure on performance in South America.

Agco is a pure-play agricultural equipment company that has traditionally been focused on tractors. We believe it will continue to be a top-three player in the ag industry. The company has been successful in emerging markets, where customers typically look for reasonably priced equipment. In developed markets, it faces competition from industry leaders Deere and CNH, which provide customers high-quality and strong-performing products, making it difficult for Agco to gain ground. The company’s peers help customers reduce the total cost of ownership through improved fuel efficiency, limited machine downtime, and consistent parts availability.

The ag slowdown has been the story for the past couple of quarters. Ag demand in South America has been weaker than ag manufacturers were expecting. Europe has also been challenged, while North America remains constructive, though U.S. corn supplies have started to tick up lately, pressuring U.S. corn prices.