As the Q1 earnings season comes to a close, it’s time to take stock of this quarter's best and worst performers in the agricultural machinery industry, including Deere (NYSE:DE) and its peers.
Agricultural machinery companies are investing to develop and produce more precise machinery, automated systems, and connected equipment that collects analyzable data to help farmers and other customers improve yields and increase efficiency. On the other hand, agriculture is seasonal and natural disasters or bad weather can impact the entire industry. Additionally, macroeconomic factors such as commodity prices or changes in interest rates–which dictate the willingness of these companies or their customers to invest–can impact demand for agricultural machinery.
The 6 agricultural machinery stocks we track reported a mixed Q1; on average, revenues missed analyst consensus estimates by 1.8%. while next quarter's revenue guidance was 11.6% below consensus. Inflation progressed towards the Fed's 2% goal at the end of 2023, leading to strong stock market performance. The start of 2024 has been a bumpier ride, as the market switches between optimism and pessimism around rate cuts due to mixed inflation data, and while some of the agricultural machinery stocks have fared somewhat better than others, they collectively declined, with share prices falling 2% on average since the previous earnings results.
Deere (NYSE:DE)
Revolutionizing agriculture with the first self-polishing cast-steel plow in the 1800s, Deere (NYSE:DE) manufactures and distributes advanced agricultural, construction, forestry, and turf care equipment.
Deere reported revenues of $13.61 billion, down 15.4% year on year, exceeding analysts' expectations by 2.2%. Overall, it was a very strong quarter for the company with a decent beat of analysts' earnings estimates.
"John Deere's second-quarter results were noteworthy in light of continued changes across the global agricultural sector," stated John C. May, chairman and chief executive officer.
The stock is down 7.7% since reporting and currently trades at $382.
Best Q1: Alamo (NYSE:ALG)
Expanding its markets through acquisitions since its founding, Alamo (NSYE:ALG) designs, manufactures, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.
Alamo reported revenues of $425.6 million, up 3.4% year on year, outperforming analysts' expectations by 3.6%. It was an impressive quarter for the company with a decent beat of analysts' earnings estimates.
Alamo pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 1.7% since reporting. It currently trades at $192.03.
Is now the time to buy Alamo? Access our full analysis of the earnings results here, it's free.
Weakest Q1: Titan International (NYSE:TWI)
Acquiring Goodyear’s farm tire business in 2005, Titan (NSYE:TWI) is a manufacturer and supplier of wheels, tires, and undercarriages used in off-highway vehicles such as construction vehicles.
Titan International reported revenues of $482.2 million, down 12.1% year on year, falling short of analysts' expectations by 10.3%. It was a weak quarter for the company with revenue guidance for next quarter missing analysts' expectations and a miss of analysts' earnings estimates.
Titan International posted the weakest performance against analyst estimates in the group. As expected, the stock is down 22.7% since the results and currently trades at $8.63.
Read our full analysis of Titan International's results here.
AGCO Corporation (NYSE:AGCO)
With a history that features both organic growth and acquisitions, AGCO (NYSE:AGCO) designs, manufactures, and sells agricultural machinery and related technology.
AGCO Corporation reported revenues of $2.93 billion, down 12.1% year on year, falling short of analysts' expectations by 3%. More broadly, it was a weak quarter for the company with a miss of analysts' organic revenue and earnings estimates.
The stock is down 9.2% since reporting and currently trades at $101.84.
Read our full, actionable report on AGCO Corporation here, it's free.
Lindsay (NYSE:LNN)
A pioneer in the field of center pivot and lateral move irrigation, Lindsay (NYSE:LNN) provides a variety of proprietary water management and road infrastructure products and services.
Lindsay reported revenues of $139.2 million, down 15.4% year on year, falling short of analysts' expectations by 3.6%. Revenue aside, it was a weak quarter for the company with a miss of analysts' organic revenue estimates.
Lindsay had the slowest revenue growth among its peers. The stock is up 9% since reporting and currently trades at $123.40.
Read our full, actionable report on Lindsay here, it's free.
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