Wells Fargo Downgrades AGCO Corporation (AGCO) to Underperform

March 20, 2013 7:27 AM EDT
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Price: $62.28 +0.97%

Rating Summary:
    6 Buy, 11 Hold, 5 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Wells Fargo downgraded AGCO Corporation (NYSE: AGCO) from Market Perform to Underperform and lowers its valuation range to $40-43 from $51-54 given their bearish view for 2014 and 2015 U.S. large farm equipment demand based on short- and longer-term commodity cycle views.

Analyst Andrew Casey states: We expect U.S. large farm equipment to have the most regional downside due to what appear to be bubble demand conditions in the market. However, the anticipated commodity price declines likely will weigh on other regional market demand in 2014 and 2015, albeit to a lesser extent. While AGCO has made substantial strides in its internal margin improvement initiatives and is less exposed to U.S. large farm equipment demand, we expect the stock to be pressured by (1) decreasing commodity prices, (2) potential longer-term decline in DE's stock price, and (3) potential negative earnings estimate revisions for 2014 and beyond.

The firm maintained 2013 EPS estimate of $5.25 (consensus $5.32), decreased their 2014 estimate to $4.80 from $6.10 (consensus $5.94) and introduced 2015 estimate of $3.60 (consensus $6.35).

For an analyst ratings summary and ratings history on AGCO Corporation click here. For more ratings news on AGCO Corporation click here.

Shares of AGCO Corporation closed at $53.12 yesterday.

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