# AGCO (AGCO)

Sector: Farm machinery

| Field | Value |
|---|---|
| Price | $103.74 |
| Fair value (Analysts) | $143.00 |
| Discount to fair value | 27.5% |
| Fair value uncertainty (Analysts) | Medium |
| Economic moat (Analysts) | None |
| LSEG analyst rating (1 strong buy to 5 strong sell) | 2.59 |
| Data as of | 2026-10-16 |
| Next earnings | 2026-10-29 (confirmed) |

## In short

The market prices AGCO for a long farm equipment downturn after it cut its 2026 outlook, and a recovery in farm demand with lower dealer inventories in 2027 can close the gap.

## Themes and gap

- Themes: Tariffs and trade (trade-tariffs), New management (management-change), Interest rates (interest-rates)
- Gap type: Slow (slow)
- Why: The gap closes only when farm income recovers and equipment demand rises, which can take several years and which AGCO cannot control.

## About

AGCO designs, makes and sells farm machinery and precision agriculture technology. Its main brands are Fendt, Massey Ferguson, Valtra and PTx. Fendt is a premium tractor brand, and Massey Ferguson sells a full range of equipment. PTx sells precision farming technology, including retrofit kits that work on other brands of machines and autonomous solutions. Independent dealers sell AGCO's products to farmers. Europe and the Middle East is its largest region, with $1.73 billion of the $2.61 billion of net sales in Q2 2026. Net sales were $10.1 billion in 2025. AGCO sold most of its Grain & Protein business in 2024, and in April 2026 it sold its 49% interest in the AGCO Finance joint ventures in the United States and Canada for about $190 million.

## Thesis

The market prices AGCO for a long downturn in farm equipment demand. Farmers face high input costs and uneven crop prices, so they delay purchases. In the first half of 2026, industry tractor sales fell 9% in North America and 11% in Brazil, and combine sales fell 39% in Brazil. On July 30, 2026, AGCO cut its 2026 outlook to net sales of $10.1 to $10.2 billion and adjusted EPS of $5.50 to $5.75, from $10.5 to $10.7 billion and about $6.00 in May. Tariffs and the conflicts in Ukraine and the Middle East add to the cost pressure on farmers. AGCO also changed its CFO in August and restructured its executive team in October 2026. For the gap to close, three things must be true. AGCO must reach its lowered 2026 outlook, with an adjusted operating margin of about 7.5%. Dealer inventories must fall to match retail demand, so that production can rise in 2027. Farm income must improve enough for demand in North America and Brazil to stop falling, while Europe stays stable. The Q3 2026 report on October 29, 2026, is the next test. The 2027 outlook in early February 2027 is the main test. If these checks pass, the gap can close over the next four to eight quarters. The main reason it may not close is a longer farm downturn, because AGCO cannot control crop prices or input costs.

## Checkpoints

- Oct 29, 2026: Q3 2026 earnings: 2026 outlook. Status: Pending. Watch: Adjusted EPS on track for the $5.50 to $5.75 outlook and lower dealer inventories pass; another cut to the outlook fails.
- Feb 2027 (estimate): 2027 outlook: end of the downturn. Status: Pending. Watch: A 2027 outlook for higher net sales and adjusted EPS than in 2026 passes; an outlook for lower sales or EPS fails.

## Balance sheet

- Cash: $573M
- Debt: $2.7B
- Net debt: $2.2B
- Interest cover: 6.9×
- Debt due within 12 months: $547M

AGCO funds its operations with senior notes, term loans and other borrowings. At June 30, 2026, debt was $2.73 billion: $546.7 million of borrowings due within one year and $2.18 billion of long-term debt. Cash fell to $573 million from $862 million at December 31, 2025, after $345 million of share buybacks in Q2 2026. AGCO also sells receivables to its finance joint ventures, and about $1.8 billion of these sold receivables were outstanding at June 30, 2026. They are not in debt. Interest cover is income from operations divided by net interest expense for the first half of 2026. Inventories rose to $3.01 billion from $2.71 billion at December 31, 2025. Free cash flow was a record $740 million in 2025.

As of 2026-06-30.

Sources:

- https://www.sec.gov/Archives/edgar/data/880266/000088026626000066/a2026earningsreleaseq2.htm
- https://www.sec.gov/Archives/edgar/data/880266/000088026626000068/agco-20260630.htm

## Recent events

- 2026-10-05: AGCO restructured its executive leadership team and reduced it by one member. Stefan Caspari became Senior Vice President and General Manager, Fendt/Valtra and Product Management, and he continues to lead the North American business. Torsten Dehner stepped down from that role.
- 2026-08-03: AGCO named Indira Agarwal, its Chief Accounting Officer, as Chief Financial Officer, effective August 1, 2026. Damon Audia, the former CFO, became President of PTx and Corporate Strategy.
- 2026-07-30: AGCO reported Q2 2026 results. Net sales fell 1.0% to $2.6 billion, and adjusted EPS was $1.43. North America sales rose 19.7%, but South America sales fell 17.9%. AGCO bought back $345 million of shares in the quarter. It lowered its 2026 outlook to net sales of $10.1 to $10.2 billion and adjusted EPS of $5.50 to $5.75.
- 2026-04-30: AGCO completed the sale of its 49% interests in the AGCO Finance joint ventures in the United States and Canada for about $190 million.
- 2026-02-05: AGCO reported 2025 results. Net sales fell 13.5% to $10.1 billion. Reported EPS was $9.75 and adjusted EPS was $5.28. Free cash flow was a record $740 million.

## Risks

- High: Farm equipment demand depends on farm income, crop prices, input costs and interest rates. In the first half of 2026, industry tractor sales fell 9% in North America and 11% in Brazil. A longer downturn lowers sales and factory use, and AGCO already cut its 2026 outlook in July.
- Medium: Most sales and production are outside the United States, and many products cross borders. Tariffs, trade disputes and currency changes can raise costs and reduce sales. AGCO's 2026 outlook reflects tariff policies as of July 30, 2026.
- Medium: South America is weak. Net sales there fell 17.9% in Q2 2026, and the region had an operating margin of minus 8.0%. Financing costs, credit conditions and politics in Brazil can keep demand low.
- Low: AGCO changed its CFO in August 2026 and restructured its executive team in October 2026. Many changes in a short time can slow decisions during a downturn.

## Links

- Page: https://picks.kamadorueda.com/company/AGCO/
- History of changes: https://picks.kamadorueda.com/company/AGCO/history/
- JSON with full history: https://picks.kamadorueda.com/data/company/AGCO.json

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