AGCO Corporation (AGCO) Buy or Sell Stock Guide

Last updated: Dec 24, '18

The analysis below may be helpful to you if you have any of the following questions about AGCO stock:

  • Is AGCO a buy or a sell?
  • Should I sell or hold AGCO stock today?
  • Is AGCO a good buy / a good investment?
  • What are AGCO analyst opinions, recommendations, ratings?

Here are AGCO stock buy reasons/signals:

1. Although Agco's market share trails Deere and CNH by a substantial margin in North America, it holds 50% of the Brazilian market.

2. As Agco has refocused its attention on internal profitability and working capital management, returns on invested capital have improved to more than 13% during the past five years versus only 10% over the prior five years.

3. The consolidation of low-horsepower tractor manufacturing in China is expected to generate $50 million-$70 million of annual savings over the long term.

4. AGCO quarterly revenue growth was 11.50%, higher than the industry and sector average revenue growth (11.08% and 7.22%, respectively).

5. AGCO profitability is improving. The YoY profit margin change was 0.08pp.

6. AGCO forward dividend yield is 1.08%, higher than the industry (0.76%) and sector (0.59%) forward dividend yields.

7. AGCO PEG ratio (P/E adjusted for growth) is 0.72, and it’s low compared to its industry peers’ PEG ratios.

8. AGCO average analyst price target ($64.33) is above its current price ($53.69).

Here are AGCO stock sell reasons/signals:

1. New Western European engines may face difficulty getting traction in Eastern Europe because of more stringent fuel requirements; even as current economic headwinds abate, Western Europe could face used-equipment oversupply.

2. Agco is working to reduce its North American dealer footprint to create more exclusive arrangements, but the process may take several years.

3. Agco's R&D spending has increased faster than Deere's and CNH's during the past five years but still trails as a percentage of sales. Agco's R&D cost growth may continue to outpace revenue gains as it fights to be relevant.

4. AGCO short share of float is 8.10%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

5. AGCO short interest (days to cover the shorts) ratio is 4.93. The stock garners more short interest than the average industry, sector or S&P 500 stock.

What are your thoughts on AGCO?

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