Mon, Nov. 28, 12:31 PM
- Piper Jaffray upgrades Deere (DE -1.5%) and five other agricultural equipment companies, saying it believes investors will continue to pay lofty multiples, given that the bottom of the cycle is close at hand, and valuations simply will be pushed out another year if the downturn persists as expected.
- In addition to DE, Jaffray upgrades AGCO (AGCO -0.2%), American Vanguard (AVD +2.5%), FMC Corp. (FMC +0.4%), Lindsay (LNN +2.6%) and CNH Industrial (CNHI -1.5%) to Neutral from Underweight
- Jaffray says DE's FY 2017 guidance that far exceeded expectations is providing the market with expectations that the cycle is nearing the bottom and poised for a recovery in the near term, and the firm continues to expect that ag will be challenging but now thinks its previous expectation to see pressure on valuations is unlikely.
Wed, Nov. 23, 3:39 PM
- Deere (DE +11.3%) powers to all-time highs following its easy FQ4 earnings and revenue beats, as factors ranging from machinery pricing to lower overheads spending helped it report a much smaller-than-expected decline in quarterly earnings, CFO Raj Kalathur said during today's earnings conference call.
- DE forecasts FY 2017 sales of its farm and construction equipment will fall by 1% Y/Y, but analysts were expecting sales to drop by ~3% after sliding 9.3% to $23.4B in 2016, and predicts next year's profit will slip by just 1% following a 21% decline in 2016 to $1.5B.
- DE also said prices for new and used equipment firmed in the quarter, taking pressure off dealers to offer discounts that squeeze margins.
- "It's not that the cycle is turning, it is that they are managing it better than before," Jefferies analyst Stephen Volkmann says.
- Caterpillar (CAT +2.7%), which has some market overlap with DE, surges to its best levels since December 2014, while AGCO (AGCO +3.4%), Lindsay, CNH Industrial (CNHI +4.7%) and Tractor Supply (TSCO +0.8%) also are higher.
Wed, Nov. 9, 3:35 PM
- Investors are betting that some big U.S. manufacturers such as Caterpillar (CAT +7.7%) could benefit from possible changes in energy, climate and tax policies in the Trump administration.
- CAT is "looking forward to building those bridges," says VP for global government and corporate affairs Kathryn Dickey Karol, adding that the company is excited about Trump’s calls for improving the U.S. transportation network.
- CAT says it will continue to push for adoption of the Trans-Pacific Partnership during the remaining days of the Obama administration; Martin Richenhagen, Chairman and CEO of farm equipment maker Agco (AGCO +0.9%), says he is concerned about Trump’s repeated support for trade protectionism during the campaign.
- The potential for federal spending boosted the likes of Fluor (FLR +10.1%), Aecom (ACM +12.6%), Jacobs Engineering (JEC +9.8%), Manitowoc (MTW +14.2%), Terex (TEX +14.8%), Vulcan Materials (VMC +9.8%) and Martin Marietta Materials (MLM +11.5%).
- Shares in Deere (DE +1.4%), Paccar (PCAR +4.5%) and Navistar (NAV +7.2%) also are higher.
Wed, Nov. 2, 10:50 AM
Thu, Oct. 27, 3:30 PM
Wed, Oct. 26, 10:31 AM
- Adjusted net income of $41.3M, or $0.51 per diluted share vs. $67.1M, or $0.77 in the same quarter a year ago.
- Sales by region: North America -8.5%; South America +13.1%; EMEA +1.7%; Asia/Pacific +18.6%.
- The company completed the acquisition of Cimbria Holdings Limited (Cimbria) on September 12.
- "2016 results reflect the adverse impact of operating in the lower end of the agricultural equipment cycle, particularly in North and South America," CEO Martin Richenhagen declared.
- Full-year earnings per share are expected to total $2.30 on net sales of $7.2B.
- Q3 results
Wed, Oct. 26, 8:24 AM
Tue, Oct. 25, 5:30 PM
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Mon, Oct. 10, 9:51 AM
- AGCO (AGCO +4.6%) soars in early trade after Wells Fargo upgraded the stock to Outperform from Market Perform.
- "After three years of demand decline, the company will benefit from an anticipated bottoming in global farm equipment demand. More favorable indications in Brazil and Europe should benefit approximately 70% of the company's revenue mix," analyst Andrew Casey said in a research note.
- He raised his price target range for the stock to $60-$63 from $46-$49.
Thu, Aug. 4, 8:13 AM
- Adjusted net income of $83.6M, or $1.02 per diluted share vs. $110M, or $1.25 in the same quarter a year ago.
- Sales by region: North America -10.2%; EMEA +4.6%; South America -14.3%; Asia/Pacific -25.9%.
- "Weak global demand for agricultural equipment is expected to negatively impact AGCO’s sales and earnings in 2016," the company said in a statement, maintaining its full-year EPS guidance of $2.30 on net sales of $7B.
- Q2 results
Thu, Aug. 4, 8:04 AM
Wed, Aug. 3, 5:30 PM
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Tue, Jul. 26, 8:43 AM
Mon, Jul. 25, 2:58 PM
- Deere (DE -2.8%) is downgraded to Underweight from Neutral with a $67 price target, cut from $76, at Piper Jaffray, which believes the current agricultural downturn will persist into 2017 for a fourth consecutive year.
- After speaking with growers, agronomists and dealers, Piper analyst Brett Wong says growing conditions have been extremely favorable and he foresees further pressure on corn prices after another strong year of U.S. corn yields, and grain prices also will remain weak, resulting in further declines in farm machinery demand.
- Farm machinery OEM stocks continue to trade at elevated multiples, expecting that this year will be trough demand with a recovery next year; Piper believes that overall global farm machinery demand will be down next year, which does not support current expectations for the stocks, and that estimates and valuation multiples are at risk.
- The firm also downgrades AGCO (AGCO -3%) and CNH Industrial (CNHI -2.6%) to Underweight from Neutral with respective $37 and $5 price targets.
Wed, Jun. 29, 8:55 AM
- AGCO agrees to acquire Danish seed and grain handler Cimbria Holdings from Silverfleet Capital for ~$340M.
- Cimbria sales, which are expected to reach $240M in FY 2016, are concentrated in western Europe with growing exposure to eastern Europe, Africa and the Middle East.
- AGCO says Cimbria’s products complement its GSI offerings and provides an opportunity to grow its business and expand its margins.
Mon, Jun. 27, 3:19 PM
- AGCO (AGCO -5.9%) is downgraded to Underweight from Neutral with a $44 price target, cut from $47, at J.P. Morgan, citing weakening fundamentals in European agriculture and the rising dollar, which is expected to weigh on the company's North American business.
- JPM says AGCO has the greatest exposure to Europe in its machinery coverage, and notes that 60% of the company's EBIT comes from Europe, Africa and the Middle East, with another 16% from South America, where political and economic instability in Brazil continue to weigh on equipment demand.
- The firm also downgrades PACCAR (PCAR -6%) to Underweight from Neutral with a $47 price targets, lowered from $58, as the company's key end markets, especially the U.K., are likely to come under pressure in the near term, and North American truck fundamentals are expected to remain weak, with further production cuts expects in H2.