Farming Is Terrible Right Now. That’s Good for Deere and AGCO Stocks - Barron’s | Reddit — r/ValueInvesting Ideas & AI Summary

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Summary

The post shares a Barron’s article arguing that the farm-equipment sector is at a cyclical trough, making stocks like Deere (DE) and AGCO (AGCO) attractive for a turnaround as farmer incomes are projected to rise in 2026–2027.
D.A. Davidson analyst initiated AGCO with a Buy rating and $160 price target (46% upside), also rates DE Buy and CNH Industrial Hold.
Author’s thesis: buying cyclical stocks at the bottom of the cycle can be rewarding, and the current “terrible” farming conditions set up a potential inflection point.
Quality assessment: This is well-researched DD based on an analyst’s initiation report and earnings-cycle analysis. It is not pure speculation; the data on earnings estimates and income projections provide a structured argument.

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*(****TLDR****: cyclical stocks often behaves differently from other stocks, but it can be rewarding if one can learn to spot the trough of the business cycle. )*

Farming Is Terrible Right Now. That’s Good for Deere and AGCO Stocks - Barron’s

By  Al Root

https://www.barrons.com/articles/deere-agco-agricultural-stock-price-rating-610c9161  
Updated July 10, 2026 4:13 pm EDT / Original July 10, 2026 10:09 am EDT

Key Points

\- D.A. Davidson analyst Michael Shlisky initiated coverage of farm-equipment maker AGCO with a Buy rating and a $160 price target.

\- AGCO stock rose 0.9% to close at $114.32 on Friday following the rating.

\- Shlisky stated that while North American agricultural equipment sales have not yet turned around, farmer cash incomes could rise in 2026 and 2027.

It’s been very tough to be a farmer lately. Higher costs and lower crop prices have squeezed income statements, leaving less money to buy tractors and other farm implements.

The sector has been stuck in a cyclical trough for a while, which, curiously, isn’t necessarily a bad thing for farming stocks.

On Thursday night, D.A. Davidson analyst Michael Shlisky launched coverage of the farm-equipment company AGCO with a Buy rating and $160 price target.

AGCO stock rose 0.9% on Friday, closing at $114.32, while the S&amp;P 500 and Dow Jones Industrial Average gained 0.4% and 0.3%, respectively.

“Ag remains bad—and that could be good,” Shliskys wrote.

Buying cyclical stocks at the bottom of the cycle is typically a winning strategy. Still, it requires some timing. Take Deere: It earned about $35 per share in fiscal year 2023. It earned under $19 a share in fiscal year 2025. Things were expected to improve in fiscal year 2026. Earnings-per-share estimates started the year north of $20, but are now down to about $18.

Things will turn around, eventually.

“We have not seen a true upturn in North American Ag Equipment sales yet, but conditions appear ripe for farmer cash incomes to inflect upward in both 2026 and 2027,” Shlisky added. “Our proprietary corn and soybean crop models suggest improved incomes in 2026 and 2027 for both crops, with soybeans particularly profitable…2026 is likely the trough.”

AGCO and its peers’ North American sales are highly correlated with farm incomes.

Shlisky’s call for a cyclical trough is positive for Deere and CNH Industrial, too. He rates Deere stock Buy and CNH stock Hold.

As for AGCO, it does a lot of business in Europe, which is in better shape than North America or Brazil, two key growing regions.

Coming into Friday trading, AGCO stock was up 8% year to date and flat over the past 12 months. CNH stock was up 12% so far this year and down 26% over the past 12 months.

Deere stock was up 27% this year and 14% over the past 12 months. Shares peaked early in 2026, when expectations for improvement were high. Now, investors are looking toward 2027 to see higher earnings for the sector.

Ideas

u/raytoei Reddit r/ValueInvesting

Deere earned ~$35/share in FY23, fell to <$19 in FY25, and FY26 estimates have been cut to ~$18 but are expected to trough in 2026 with recovery in 2027. Analyst Shlisky rates DE Buy, implying that the worst of the earnings cycle is priced in and future cash flows will improve as farmer incomes rebound. Buying Deere at the cyclical trough before fundamentals inflect offers a classic value trade with potential for multiple expansion and earnings growth. Prolonged low crop prices, higher input costs, or a global recession delaying the recovery; China/Europe demand shocks.

u/raytoei Reddit r/ValueInvesting

AGCO was initiated with Buy and $160 target (40% upside from ~$114). Analyst notes AGCO’s Europe business is healthier than North America/Brazil. The new coverage and specific price target create a clear catalyst, and the stock is up only 8% YTD, leaving more room relative to DE. AGCO offers higher upside potential due to lower prior run-up and a fresh analyst catalyst, with European diversity cushioning the North American trough. European ag slowdown, currency headwinds, or failure of the U.S. turnaround to materialize; lower liquidity than DE.

u/raytoei Reddit r/ValueInvesting

The analyst rates CNH Industrial as Hold, reflecting no strong conviction either way; the stock is up 12% YTD but down 26% over 12 months. The Hold rating suggests limited upside catalysts relative to DE/AGCO, but the cyclical trough could still benefit CNH if the sector turns. CNH is a less compelling pick now; investors should monitor for a potential upgrade or clearer signs of a revenue inflection before committing. Weaker North American exposure; higher debt or operational issues relative to peers.

Farming Is Terrible Right Now. That’s Good for Deere and AGCO Stocks - Barron’s

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