Wrapping up Q1 earnings, we look at the numbers and key takeaways for the agricultural machinery stocks, including Lindsay (NYSE:LNN) 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 5 agricultural machinery stocks we track reported a very strong Q1. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 2.1% below.
Luckily, agricultural machinery stocks have performed well with share prices up 11.8% on average since the latest earnings results.
Best Q1: 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 $187.1 million, up 23.5% year on year. This print exceeded analysts’ expectations by 4%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EPS estimates.
“Strength in international irrigation more than offset expected softness in the North America irrigation market, driving overall irrigation revenue growth in our fiscal second quarter," said Randy Wood, President and Chief Executive Officer.
Lindsay Total Revenue
Lindsay achieved the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 9.1% since reporting and currently trades at $141.84.
With a history that features both organic growth and acquisitions, AGCO (NYSE:AGCO) designs, manufactures, and sells agricultural machinery and related technology.
AGCO reported revenues of $2.05 billion, down 30% year on year, outperforming analysts’ expectations by 1.8%. The business had an exceptional quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
AGCO Total Revenue
The market seems happy with the results as the stock is up 28% since reporting. It currently trades at $108.43.
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 $490.7 million, up 1.8% year on year, exceeding analysts’ expectations by 5.7%. It was a satisfactory quarter as it also posted a solid beat of analysts’ EBITDA estimates.
Interestingly, the stock is up 2.5% since the results and currently trades at $7.50.
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 $11.17 billion, down 17.9% year on year. This number missed analysts’ expectations by 9.7%. Zooming out, it was actually a very strong quarter as it produced a solid beat of analysts’ EBITDA estimates.
Deere had the weakest performance against analyst estimates among its peers. The stock is up 5.8% since reporting and currently trades at $525.75.
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 $391 million, down 8.1% year on year. This print was in line with analysts’ expectations. It was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ EPS estimates.
The stock is up 13.8% since reporting and currently trades at $203.19.
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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