AGCO Company (AGCO – Free Report) recently announced an investment in a leader in precision farming, OPTIfarm, to improve the animal welfare of farmers.
OPTIfarm uses advanced software and data analytics operated by a team of experts to help farmers create the best environment for their livestock. The system improves farm productivity and helps producers care for their animals by achieving key livestock operational goals, such as improved feed conversion, weight gain and uniformity. This technology monitors natural animal behavior and recommends the best conditions for livestock health, welfare and safety.
The latest investment supports AGCO Corporation’s focus on providing industry-leading smart farming solutions to improve farmers’ net farm income and animal welfare.
Last September, AGCO Corporation partnered with Faromatics to bring smart farming solutions to ranchers. Faromatics, the world’s first rooftop robot, monitors broilers and helps farmers improve animal welfare and agricultural productivity. The AI-enabled robot uses an array of sensors to measure vital parameters such as thermal sensation, air quality, light and sound while detecting animal health and equipment risks agricultural.
AGCO continues to invest in premium products, technologies and smart farming solutions to improve distribution and build digital capabilities to drive margins and strengthen product offerings. The company is investing in Fuse OEM precision farming solutions as farmers seek increased yields and cover high fertilizer and diesel costs. These improvements will support the company’s investments in precision agriculture and digital initiatives. AGCO is poised to benefit from the precision planting business, growth swathes of a new product pipeline and its modernization approach.
High grain prices continue to support strong earnings for businesses, which is driving demand for farm equipment. These encourage farmers to upgrade and replace their aging fleets of large equipment, which will boost AGCO’s revenue.
AGCO expects current year sales and earnings growth to benefit from robust end-market demand, positive industry demand trends and strong agricultural prospects. Net sales for the current year are expected to be between $12.5 billion and $12.7 billion. Gross and operating margins are expected to be above 2021 levels, driven by higher sales and production volumes, favorable pricing and improved factory productivity. Management expects earnings per share for the current year to be between $11.70 and $11.90.
AGCO shares have lost 12.1% over the past year, compared to a 4.8% decline in the industry.
Image source: Zacks Investment Research
Zacks Ranking and Stocks to Consider
AGCO currently carries a Zacks Rank #3 (Hold).
Some higher ranked stocks in the industrials sector are Graphic packaging holding company (GPK – free report), Myers Industries (MY – free report) and Packing Company of America (PKG – free report). All of these stocks currently sport a Zacks rank of #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks here.
Graphic Packaging has an estimated profit growth rate of 86.8% for the current year. Over the past 60 days, the Zacks consensus estimate for current-year earnings has been revised up 7.6%.
Graphic Packaging has realized an earnings surprise for the last four quarters of 7.2% on average. Shares of the company have appreciated 8% in the past six months.
Myers Industries forecasts a 67% earnings growth rate for 2022. Zacks’ consensus estimate for current-year earnings is up 27% in the last 60 days.
MYE has a last four quarter earnings surprise of 20.1% on average. Shares of Myers Industries are up 25% in the past six months.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. Zacks’ consensus estimate for current-year earnings is up 4.2% over the past 60 days.
PKG has a surprise on earnings for the last four quarters of 19.6% on average. Packaging Corporation shares are up 16% in the past six months.