Let’s dig into the relative performance of Alamo (NYSE: ALG) and its peers as we unravel the now-completed Q2 agricultural machinery earnings season.
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 strong Q2. As a group, revenues missed analysts’ consensus estimates by 0.5% while next quarter’s revenue guidance was in line.
While some agricultural machinery stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4% since the latest earnings results.
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 $419.1 million, flat year on year. This print exceeded analysts’ expectations by 2.4%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.
Jeff Leonard, Alamo Group's President and Chief Executive Officer commented, "The Company's solid second quarter results reflected improved operating margin performance. The results were primarily driven by sustained strong demand from governmental agencies and specialty contractors for products offered by the Industrial Equipment Division, coupled with encouraging sequential recovery in markets served by the Vegetation Management Division. While consolidated net sales growth was modest compared to a strong prior year second quarter, sequential improvement exceeded 7%.
Unsurprisingly, the stock is down 8% since reporting and currently trades at $207.
Is now the time to buy Alamo? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $169.5 million, up 21.7% year on year, outperforming analysts’ expectations by 4.6%. The business had an incredible quarter with an impressive beat of analysts’ organic revenue estimates and a beat of analysts’ EPS estimates.
Lindsay achieved the fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $136.41.
Is now the time to buy Lindsay? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $460.8 million, down 13.4% year on year, falling short of analysts’ expectations by 3.6%. It was a slower quarter as it posted EPS in line with analysts’ estimates and EBITDA guidance for next quarter missing analysts’ expectations.
As expected, the stock is down 4.8% since the results and currently trades at $8.65.
Read our full analysis of Titan International’s results here.
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 $10.36 billion, down 9% year on year. This result came in 11.8% below analysts' expectations. Overall, it was a mixed quarter for the company.
Deere had the weakest performance against analyst estimates among its peers. The stock is down 8.5% since reporting and currently trades at $469.45.
Read our full, actionable report on Deere here, it’s free.
AGCO (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 reported revenues of $2.64 billion, down 18.8% year on year. This print beat analysts’ expectations by 5.9%. It was an exceptional quarter as it also produced a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
AGCO achieved the biggest analyst estimates beat but had the slowest revenue growth among its peers. The stock is up 1.8% since reporting and currently trades at $108.48.
Read our full, actionable report on AGCO here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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