Agco Corporation (AGCO.N): Still Searching for Better Days in Ag

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Agco Corporation (AGCO.N): Still Searching for Better Days in Ag

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31 Jul 2026 04:00:00 ET │ 13 pages

Agco Corporation (AGCO.N)

Still Searching for Better Days in Ag

CITI'S TAKE

We have updated our model following AGCO’s 2Q results. We lower our 2026E

adj. EPS to $5.60 from $6.05, our 2027E adj. EPS to $6.90 from $7.65, and our

2028E adj. EPS to $8.40 from $9.50, driven by a weaker outlook across all key Neutral

regions. While there were some positives to point to on the call, particularly Price (30 Jul 26 16:00) US$107.13

around continued share gain commentary and progress on expanding PTx,

softening end-markets set up a more challenged 2H26. Our understanding is Target price US$115.00↓

that AGCO is planning to underproduce retail demand by ~15% in LatAm and from US$125.00

~10% in NA for FY26. AGCO still views 2026 as the trough for global ag Expected share price return 7.3%demand, which aligns with our expectations, but it is admittedly a little

difficult to point to a catalyst aside from some increasingly pent-up Expected dividend yield 1.2%

replacement demand. We maintain our Neutral rating on AGCO and lower our Expected total return 8.5%

price target to $115 from $125 on lower estimates. Market Cap US$7,757M

Inventory/Production — Following a weaker than expected 2Q in Europe, which

management largely attributed to weakness in Germany, AGCO’s dealer inventories

month of supply dropped to around 3.5 months from just under 4 months in 1Q, vs

Price Performanceits 4 month target range. We gather that AGCO is still planning to produce in-line

with retail demand in Europe for the year, although the company is planning to take (RIC: AGCO.N, BB: AGCO US)

some incremental days out of production in Europe in 3Q, weighing on 3Q margins.