Fly News Breaks for December 16, 2019
Dec 16, 2019 | 07:59 EDT
As previously reported, Morgan Stanley analyst Courtney Yakavonis upgraded Agco to Equal Weight from Underweight with a price target of $88, up from $74. She believes the trend toward Precision Ag, along with Agco's new products and its parts business, should drive better than expected sales growth and forecasts margin improvement in 2020 and 2021 despite the soft European industry backdrop. The company's FY20 EPS guidance at its analyst day last Friday was below consensus and forecasts will continue to fall, but management characterized their view as "very conservative," leading Yakavonis to see the door being opened for positive earnings revisions going forward. Agco shares typically trade at only a 1% discount during periods of positive growth and positive earnings revisions and the analyst expects it multiple should begin to re-rate given the view she has of its upcoming margin improvement.
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