Analysts at Bernstein have highlighted agricultural equipment producers as beneficiaries of expanding recovery scenarios, following meetings with major manufacturers at the Farm Progress Show.
Corn prices in North America are trading near $5 per bushel, above breakeven costs of roughly $4.90 on rented land and $3.60 on owned land, with scenarios projecting further increases to $6–$7 per bushel. The optimism is driven by lower-than-expected crop yields from drought conditions, rising Chinese soybean demand, potential growth in biofuel use and an aging equipment fleet requiring replacement. In Europe, the outlook remains unchanged, though uncertainty surrounding the 2028 Common Agricultural Policy reform could spur pre-buying activity in 2027. South America’s outlook continues to lag despite the release of FINAME funding in July.
AGCO is positioned as a market share gainer emerging from the downturn, with Bernstein reiterating plans to double its North American market share to about 20% over five years. The company has achieved 200 basis points of year-over-year gains, including 300 basis points in large tractors across its Fendt and Massey brands. Strategic moves include a unified North American leadership structure, an expanded mobile service network targeting 50% coverage and a strong product pipeline with 14 launches in 2025 and 12 in 2026. While Baird upgraded AGCO to Outperform citing margin recovery potential, UBS and DA Davidson lowered price targets due to regional risks and agricultural market challenges.
CNH Industrial is described as the "self-help story of the next cycle," with management projecting 50–70 basis points of year-over-year EBIT margin growth in 2027 under its control. The company is focusing on supply chain optimization, global dealer rationalization and narrowing trade-in valuation gaps. Analysts at Evercore ISI and Baird have upgraded CNH to Outperform, and the company raised its 2026 guidance amid improving tariff conditions and cost-saving initiatives.
Deere & Company is emphasizing its precision agriculture ecosystem, transitioning from a collection of features to an integrated farm operating system. Recent product introductions include the JD AI assistant embedded in the Operations Center, enabling farmers to extract insights via natural language, and See & Spray Gen 2, which has expanded into additional crops and fungicide applications while quantifying yield increases. The technology is currently deployed across 4.5 million acres. Deere reported third-quarter earnings that exceeded expectations, with agricultural equipment margins surpassing forecasts, and received Outperform upgrades from Evercore ISI and Baird.
