Zacks Industry Outlook Highlights Deere, CNH Industrial, AGCO, Lindsay and Kubota

For Immediate ReleaseChicago, IL – June 5, 2025 – Today, Zacks Equity Research discusses Deere & Co. DE, CNH Industrial N.V. CNH, AGCO Corp. AGCO, Lindsay Corp. LNN and Kubota Corp. KUBTY.Industry: Farm EquipmentLink: https://www.zacks.com/commentary/2484121/3-farm-equipment-stocks-to-watch-amid-industry-challengesThe Zacks Manufacturing - Farm Equipment industry is facing near-term challenges from weak commodity prices and high costs. However, it will eventually benefit from sustained demand for agricultural equipment, driven by a growing population.Industry players like Deere & Co., CNH Industrial N.V., AGCO Corp. and Lindsay Corp. are well-poised to benefit from this demand by expanding their product offerings. The industry’s emphasis on revolutionizing agriculture with technology to automate farming is expected to be a major catalyst. Deere, CNH Industrial, AGCO, Lindsay and Kubota Corp. are thus investing heavily in upping their technology game.About the IndustryThe Zacks Manufacturing - Farm Equipment industry comprises companies that manufacture agricultural equipment. These include tractors, combines, cotton pickers and harvesting equipment; tillage, seeding and application equipment, consisting of sprayers, nutrient management and soil preparation machinery; and hay and forage equipment, comprising self-propelled forage harvesters and attachments, balers and mowers.Some companies in the industry produce turf and utility equipment, consisting of riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, commercial mowing equipment, and garden tillers and snow throwers. Some participants manufacture irrigation equipment. Deere, CNH Industrial and Kubota are presently the top three global manufacturers of agricultural equipment (in that order).Trends Shaping the Future of the Manufacturing - Farm Equipment IndustryLow Commodity Prices Act as Woe: The U.S. Department of Agriculture forecasts a 29.5% year-over-year increase in net farm income to $180.1 billion for 2025, indicating a rise of 29.5% from that reported in 2024. This projects an improved scenario, considering the 19% and 6% declines in net farm income in 2023 and 2024, respectively.However, the increase in net farm income this year will be mainly due to the $33.1-billion year-over-year increase in direct government farm payments to $42.4 billion. Meanwhile total crop receipts are forecast to decrease 2.3% from the 2024 level due to lower soybeans and corn prices. Soybean prices have dipped lately due to escalating U.S. and China trade tensions, which added to downward pressure from favorable crop conditions in the U.S. Midwest and lingering uncertainty over U.S. biofuel policy. Corn prices have declined 3.9% year to date.Need for Food to Drive Industry Demand: Despite the ongoing volatility in commodity prices and lower crop receipts, agricultural equipment demand will continue to be supported by increased global demand for food, stemming from population growth and an increasing proportion of the population aspiring for better living standards. In the United States, the agricultural machinery market is forecast to reach $42.05 billion in 2025 and grow to $57.08 billion in 2030, seeing a compound annual growth rate (CAGR) of 6.3%.With farm sizes increasing, there is a greater need for labor, but escalating labor costs are prompting farmers to turn to mechanization. Moreover, subsidies on agricultural machinery purchases are enabling even small-scale farmers to invest in equipment.Pricing, Cost-Cutting Actions to Boost Margins: The industry has not been immune to the rampant cost inflation prevailing in the sector. Constraints on the availability of raw materials, labor and trucking resources have led to higher lead times for deliveries. However, the industry players have recently been reporting improvements in the supply chain. The companies have been implementing pricing and cost-reduction actions, which are likely to help sustain margins.Technologically Advanced Machinery Gaining Popularity: Customers are increasingly relying on advanced technology, smart farming solutions and mechanization to run their operations. Thus, the industry participants are enhancing investments in launching products equipped with advanced technologies and features to keep up with customers' evolving demands. Precision agriculture technology is expected to be a key catalyst, as it enables farmers to increase yield with reduced input costs and sustainability benefits. DE, CNH and AGCO are currently the forerunners in this.Zacks Industry Rank Indicates Dull ProspectsThe Zacks Manufacturing - Farm Equipment industry is part of the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #204, which places it at the bottom 16% of 244 Zacks industries.The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dim prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.Despite the bleak near-term prospects of the industry, we will present a few Manufacturing - Farm Equipment stocks that can be retained in one’s portfolio. It is worth taking a look at the industry’s stock-market performance and valuation picture before that.Industry vs. Broader MarketThe Zacks Manufacturing - Farm Equipment industry has outperformed its sector and the Zacks S&P 500 composite over the past 12 months. Stocks in this industry have grown 33.7% in the past 12 months compared with the S&P 500’s growth of 13.7%. The Industrial Products sector has risen 1.9% in the said time frame.Industry's Current ValuationOn the basis of the forward EV/EBITDA ratio, which is a commonly used multiple for valuing farm equipment stocks, we see that the industry is currently trading at 53.56X compared with the S&P 500’s 13.48X. The Industrial Products sector’s forward 12-month EV/EBITDA is 19.74X.Over the last five years, the industry traded as high as 56.44X and as low as 21.11X, the median being 27.59X.3 Manufacturing - Farm Equipment Stocks to Keep an Eye OnDeere: The company is witnessing solid growth in order levels, which is expected to aid its top-line performance. DE will continue to benefit from its focus on launching products equipped with advanced technologies and features that provide it with a competitive edge. Efforts to expand precision agriculture will be a significant growth driver.Replacement demand, triggered by the need to upgrade old equipment, will continue to support its revenues. Considering that Deere also makes construction equipment, it will benefit from strong demand in the residential and non-residential construction markets. DE’s cost-control actions have been supporting margins despite the persistent inflationary pressures.The company recently acquired a provider of remote imagery solutions for agriculture, Sentera, to advance its technology offerings and support more farmers. Deere plans on integrating Sentera's innovative imagery capabilities with its Operations Center portfolio offerings. This will help farmers generate data-driven decisions that boost farm profitability, efficiency and sustainability. Shares of the company have gained 15.3% in the past 6 months.The Zacks Consensus Estimate for the Moline, IL-based company has a trailing four-quarter earnings surprise of around 11%, on average. Deere currently has an estimated long-term earnings growth rate of 8.4% and a Zacks Rank of 3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.AGCO: The company has been gaining from improved farm dynamics and increasing replacement demand for old equipment. It has been investing in products, precision farming technology, and smart farming solutions to improve distribution and enhance digital capabilities to strengthen product offerings.These efforts and the company’s cost-control measures have driven margin expansion over the past few quarters. AGCO is focusing on strategic transformation. It intends to streamline and focus its portfolio of agricultural machinery and precision agriculture technology solutions.In line with this, it has formed PTx, which integrates the precision agriculture technology from AGCO's tech stack's pillars, Precision Planting and its most recent joint venture, PTx Trimble. This move will facilitate AGCO’s rapid growth in technology transformation and provide seamlessly compatible, powerfully simple precision ag solutions. Shares of the company have gained 2.7% in the past 6 months.AGCO has an estimated long-term earnings growth rate of 13.1%. This Duluth, GA-based company currently carries a Zacks Rank #3. The consensus estimate for AGCO’s 2025 earnings has moved up 1% in the past 60 days.Lindsay: The company acquired a 49.9% minority interest in Pessl Instruments GmbH in January 2025. This will help accelerate innovations in water management and increase LNN’s global reach. Project opportunities in developing international irrigation markets continue to be robust, driven by food security and water scarcity concerns.The $110-billion funding under the Infrastructure Investment and Jobs Act for roads, bridges and other transportation projects is expected to translate into higher demand for Lindsay. LNN is also well-poised to gain from demand for its Road Zipper System. The system is a highly differentiated product that addresses key infrastructure needs, such as reducing congestion, lowering carbon emission, improving commuter travel time and increasing driver safety. Road Zipper Systems are gaining popularity globally for their faster implementation and lower costs than constructing lanes.Shares of the company have gained 8.2% in the past 6 months. The Omaha, NE-based company has a trailing four-quarter earnings surprise of 17.9%, on average. It currently carries a Zacks Rank #3.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.comhttps://www.zacks.comPast performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.5% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lindsay Corporation (LNN): Free Stock Analysis Report Deere & Company (DE): Free Stock Analysis Report AGCO Corporation (AGCO): Free Stock Analysis Report CNH Industrial N.V. (CNH): Free Stock Analysis Report Kubota Corp. (KUBTY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks