It's shaping up to be a tough period for AGCO Corporation (NYSE:AGCO), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$2.6b missed by 10%, and statutory earnings per share of US$0.40 fell short of forecasts by 58%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the consensus from AGCO's 13 analysts is for revenues of US$11.1b in 2025, which would reflect a chunky 12% decline in revenue compared to the last year of performance. Per-share earnings are expected to leap 195% to US$6.72. In the lead-up to this report, the analysts had been modelling revenues of US$11.7b and earnings per share (EPS) of US$7.59 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.5% to US$105. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on AGCO, with the most bullish analyst valuing it at US$120 and the most bearish at US$87.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await AGCO shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 9.8% by the end of 2025. This indicates a significant reduction from annual growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.1% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - AGCO is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AGCO. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of AGCO's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple AGCO analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 4 warning signs for AGCO (1 is potentially serious!) that you need to take into consideration.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
