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AGCO (NYSE:AGCO) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

AGCO Corporation (NYSE:AGCO) is scheduled to report Q3 earnings results on November 3, 2020.

The company is expected to report earnings of $0.99/share on revenue of $2.141 billion. The consensus earnings per share (EPS) of $0.99/share is based on a poll of 17 analysts and represents a growth in eps of 21.0% over the same quarter last year, when the company reported earnings of $0.82/share.

The revenue forecast of $2.141 billion based on a poll of 13 analysts implies a year-over-year (YoY) growth in revenue of 1.5%. Last year the company reported $2.109 billion in revenue for the quarter.

Expected to report EPS growth of 21.0% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $2,141.45 $2,109.40 1.5%
EPS $0.99 $0.82 21.0%

Earnings Call Trends

Historically, management has exceeded analyst expectations 7 out of the last 8 tracked quarters, and missed expectations 1 quarters.

What are your expectations from AGCO Corporation for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.08 $1.11 1,353.5% Beat
Q1, 2020 $0.41 $0.86 111.7% Beat
Q4, 2019 $1.55 $0.94 −39.5% Missed
Q3, 2019 $0.80 $0.82 2.7% Beat
Q2, 2019 $1.59 $1.82 14.3% Beat
Q1, 2019 $0.43 $0.86 102.2% Beat
Q4, 2018 $1.22 $1.31 7.0% Beat
Q3, 2018 $0.82 $0.91 10.8% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 3.5%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $63.43 $65.63 3.5% Increase
May 5, 2020 $49.64 $48.50 −2.3% Decline
February 6, 2020 $73.22 $66.85 −8.7% Decline
October 29, 2019 $77 $76.19 −1.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.94, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.94 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

AGCO Corporation is currently trading at $77.19/share, down −1.1% for the day. The company is trading at approximately 92.0% of its 52-week high of $83.58/share. The company’s stock price is up 17.6% since the last earnings report and down −5.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 45.42 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:AGCO Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 107.38 and a forward P/E multiple of 20.70.

AGCO Corporation’s current share price also implies a price-to-book (P/B) multiple of 2.15. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $77.19
P/E Ratio 107.4x
P/E Ratio (Fwd) 20.7x
PEG Ratio −1.3
Total Debt / Total Capital 24.9%
Levered Free Cash Flow $411.2 million
EV / EBITDA 9.7x

Finbox

AGCO Corporation is a mid-cap stock with a market capitalization of $5.843 billion and a total enterprise value of $7.434 billion. The company operates in the Industrials sector and the Machinery industry.

AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide. It offers high horsepower tractors for row crop production, soil cultivation, planting, land leveling, seeding, and commercial hay operations; utility tractors for small- and medium-sized farms, as well as for dairy, livestock, orchards, and vineyards; and compact tractors for small farms, specialty agricultural industries, landscaping, equestrian, and residential uses. The company also provides grain storage bins and related drying and handling equipment systems; seed-processing systems; swine and poultry feed storage and delivery; ventilation and watering systems; and egg production systems and broiler production equipment. In addition, it offers round and rectangular balers, loader wagons, self-propelled windrowers, forage harvesters, disc mowers, spreaders, rakes, tedders, and mower conditioners for harvesting and packaging vegetative feeds used in the beef cattle, dairy, horse, and renewable fuel industries. Further, the company provides implements, including disc harrows leveling seed beds and mixing chemicals with the soils; heavy tillage to break up soil and mix crop residue into topsoil; field cultivators that prepare smooth seed bed and destroy weeds; drills for small grain seeding; planters and other planting equipment; and loaders. Additionally, it offers combines for harvesting grain crops, such as corn, wheat, soybeans, and rice; and application equipment, such as self-propelled, three- and four-wheeled vehicles, and related equipment for liquid and dry fertilizers and crop protection chemicals, and for after crops emerge from the ground, as well as produces diesel engines, gears, and generating sets. The company markets its products under the Challenger, Fendt, GSI, Massey Ferguson, and Valtra brands through a network of independent dealers and distributors. AGCO Corporation was founded in 1990 and is headquartered in Duluth, Georgia.

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