DA Davidson initiated coverage of agricultural machinery manufacturer AGCO with a Buy rating and a $160 price target. Analyst Michael Shlisky noted that AGCO's focus on Europe, where agricultural trends are moderately healthy despite negative sentiment surveys, historically signals a good time to buy the stock. He added that North American ag equipment sales appear to have reached a bottom, with farmer cash incomes expected to rise in 2026 and 2027, positioning AGCO to outperform when the market recovers. AGCO has already doubled its operating margins from a prior trough of about 4% to the current roughly 8%, and management is targeting an additional 400 to 500 basis points of improvement from the prior mid-cycle level of 9%.
AGCO CorporationDA Davidson initiates Buy rating and $160 price target, citing bottoming ag equipment sales and margin improvement potential.