Analyst Note| Dawit Woldemariam |
Agco’s third-quarter results showed resilience in the midst of a constrained supply chain environment. As a result, management lowered its 2021 full-year guidance. Net sales are now expected to come in between $10.9 billion and $11.1 billion, which is down from the $11.3 billion to $11.5 billion range provided in the second quarter of 2021. After adjusting our near-term revenue and margin expectations for the company’s updated guidance, we lowered our fair value estimate to $114 from $116, previously. That said, our outlook for agriculture demand remains positive, given the support that high commodity prices have provided farmers’ income levels.