Why Are Analysts Cautiously Optimistic on AGCO?

Shares of AGCO Corporation (AGCO) slipped 1.1% on Monday and a further 1.5% in Tuesday’s early trade on no company-specific news but a possibility that investors are wary of the rise in insider trading activities over the past month.

Based on the recent corporate insider activity, sentiments seem Negative about the stock. This means that over the past quarter there has been an increase in insiders selling their shares of AGCO.

Last month, AGCO’s VP & CAO Long Lara Thrush sold shares worth $105,795, while its SVP Chief HR Officer Harris Ivory Marie disposed of $74,246 worth of shares.

Nevertheless, the stock has been trading 22.3% higher so far this year, riding on its decent fundamentals and sound first quarter results.

In Q1, AGCO beat market expectations on both revenues and earnings fronts. The top line was up 23% year-over-year and earnings more than doubled from the year-ago period.

AGCO manufactures and distributes agricultural equipment and related replacement parts. Its products include tractors, combines, self-propelled sprayers, hay tools, forage equipment, seeding and tillage equipment, implements, and grain storage and protein production systems.

Stock Rating

Recently, JPMorgan analyst Tami Zakaria maintained a Buy rating on AGCO Corporation and raised the price target to $178 from $170. The new price target implies 24.4% upside potential from current levels.

The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on four Buys and three Holds. AGCO’s average price target of $155.29 implies 8.5% upside potential to current levels.

According to TipRanks’ Stock Investors tool, investors seem bullish on AGCO. Per the tool, 36.2% of investors holding portfolios on TipRanks have increased their stake in AGCO stock over the last 30 days. Further, 2.3% of these individuals have raised their holdings in the recent week. 

Also, AGCO currently scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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