Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Titan International (NYSE:TWI) and the best and worst performers in the agricultural machinery industry.
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 5 agricultural machinery stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 11.1% below.
Thankfully, share prices of the companies have been resilient as they are up 9.5% on average since the latest earnings results.
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 $448 million, up 11.5% year on year. This print fell short of analysts’ expectations by 5%. Overall, it was a disappointing quarter for the company with full-year EBITDA guidance missing analysts’ expectations.
Paul Reitz, President and Chief Executive Officer stated, "I have been spending a lot of time with customers in recent months, and it is clear that Titan's position as a valued partner centers on the innovative nature of the products we have developed and continue to develop. The Low-Side Wall ("LSW") wheel/tire assemblies continue to capture attention in the marketplace and I recently heard that directly from some very large farmers.
Titan International achieved the fastest revenue growth but had the weakest full-year guidance update of the whole group. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $7.37.
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Best Q3: 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 $9.28 billion, down 32.8% year on year, in line with analysts’ expectations. The business had an exceptional quarter with a solid beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 15% since reporting. It currently trades at $466.
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 $2.60 billion, down 24.8% year on year, falling short of analysts’ expectations by 10.4%. It was a disappointing quarter as it posted full-year revenue and EPS guidance missing analysts’ expectation.
AGCO Corporation delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. Interestingly, the stock is up 3.4% since the results and currently trades at $101.20.
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 $155 million, down 7.3% year on year. This result surpassed analysts’ expectations by 6.5%. Aside from that, it was a mixed quarter as it also logged a solid beat of analysts’ EPS estimates but a significant miss of analysts’ adjusted operating income estimates.
Lindsay pulled off the biggest analyst estimates beat among its peers. The stock is up 15.4% since reporting and currently trades at $131.62.
Alamo (NYSE:ALG)
Expanding its markets through acquisitions since its founding, Alamo (NSYE:ALG) designs, manufactures, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural use.Alamo reported revenues of $401.3 million, down 4.4% year on year. This print missed analysts’ expectations by 0.7%. It was a softer quarter as it also logged a miss of analysts’ EPS estimates.
The stock is up 16.6% since reporting and currently trades at $197.89.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
