Bernstein analysts highlight agricultural equipment stocks as recovery candidates following discussions with major producers at the Farm Progress Show, citing firmer crop prices and an aging equipment base.
North American corn prices currently trade near $5 per bushel, above breakeven costs of roughly $4.75 on rented land and $3.60 on owned land. Analysts note scenarios where prices could reach $6–$7 per bushel, driven by drought-reduced yields, increased Chinese soybean purchases, biofuel demand growth and an aging fleet of farm machinery.
AGCO is positioned as a market share gainer, with Bernstein reiterating plans to double its North American share to about 20% over five years. The company reports year-over-year gains of 200 basis points, including 300 basis points in large tractors across Fendt and Massey brands. AGCO has reorganized North American leadership for a unified regional strategy and expanded its mobile service coverage to 50%. Fourteen new products are scheduled for 2025 and twelve for 2026. While Baird upgraded AGCO to Outperform, UBS and DA Davidson lowered price targets on regional risks.
CNH Industrial is described as a self-help story for the next cycle, with management projecting 50–70 basis points of year-over-year EBIT margin growth in 2027. The company is executing supply chain optimization in phases, rationalizing its global dealer network, narrowing trade-in valuation gaps and improving product quality. Evercore ISI and Baird upgraded CNH to Outperform, with guidance raised for 2026 on improving tariff conditions and cost-saving initiatives.
Deere & Company is advancing its precision agriculture ecosystem, transitioning from feature-based tools to an integrated farm operating system. Recent innovations include the JD AI assistant embedded in the Operations Center, enabling natural language queries for farm insights, and See & Spray Gen 2, which expands automated spraying to additional crops and fungicide applications. The technology is now deployed across 4.5 million acres. Deere reported third-quarter earnings above expectations, with agricultural equipment margins exceeding forecasts. The stock was trading at $672.42, up $17.51, or 2.67%, following upgrades from Evercore ISI and Baird.
Europe’s outlook remains stable, though uncertainty surrounding the 2028 Common Agricultural Policy reform could spur pre-buying activity in 2027. South America’s market remains subdued despite the release of FINAME funding in July.
