Wrapping up Q1 earnings, we look at the numbers and key takeaways for the agricultural machinery stocks, including Titan International (NYSE:TWI) 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 6 agricultural machinery stocks we track reported a mixed Q1; on average, revenues missed analyst consensus estimates by 1.8%. while next quarter's revenue guidance was 11.6% below consensus. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and agricultural machinery stocks have had a rough stretch, with share prices down 8.8% on average since the previous earnings results.
Weakest Q1: Titan International (NYSE:TWI) 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 $482.2 million, down 12.1% year on year, falling short of analysts' expectations by 10.3%. Overall, it was a weak quarter for the company with revenue guidance for next quarter missing analysts' expectations and a miss of analysts' earnings estimates.
Paul Reitz, President and Chief Executive Officer, stated, "The last two months have been very exciting for us as we have been running full speed integrating Carlstar into our existing operations. I have been particularly impressed by the enthusiasm I see from everyone at Titan and our new team members that joined us with the acquisition. One of the key strategic rationales for the acquisition was our expected ability to be a 'one stop shop' for customers by delivering best in class products with a deep portfolio for both aftermarket and OEM channels. From top to bottom, our employees understand this vision and are working hard every day to make it happen. We have made a lot of progress integrating Carlstar's operations and are very pleased by the initial feedback we've received from the market on the 'new Titan' and how that benefits our customers."
Titan International delivered the weakest performance against analyst estimates of the whole group. The stock is down 37.4% since reporting and currently trades at $6.99.
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Best Q1: Alamo Group (NYSE:ALG) Expanding its markets through acquisitions since its founding, Alamo (NSYE:ALG) designs, manufactures, and services high-quality vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.
Alamo Group reported revenues of $425.6 million, up 3.4% year on year, outperforming analysts' expectations by 3.6%. It was an impressive quarter for the company with a decent beat of analysts' earnings estimates.
Alamo Group delivered the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a great quarter compared its peers, the market seems unhappy with the results as the stock is down 15.6% since reporting. It currently trades at $164.89.
AGCO Corporation (NYSE:AGCO) With a history that features both organic growth and acquisitions, AGCO (NYSE:AGCO) designs, manufactures, and sells agricultural machinery and related technology.
AGCO Corporation reported revenues of $2.93 billion, down 12.1% year on year, falling short of analysts' expectations by 3%. It was a weak quarter for the company with a miss of analysts' organic revenue and earnings estimates.
As expected, the stock is down 15.5% since the results and currently trades at $94.73.
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 $139.2 million, down 15.4% year on year, falling short of analysts' expectations by 3.6%. Revenue aside, it was a weak quarter for the company with a miss of analysts' organic revenue estimates.
Lindsay had the slowest revenue growth among its peers. The stock is up 2.4% since reporting and currently trades at $115.88.
Deere (NYSE:DE) 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 $13.61 billion, down 15.4% year on year, surpassing analysts' expectations by 2.2%. Zooming out, it was a very strong quarter for the company with a decent beat of analysts' revenue and earnings estimates.
The stock is down 15.1% since reporting and currently trades at $351.55.
This content was originally published on Stock Story
