NEW YORK (TheStreet) -- AGCO (AGCO) - Get Report shares are up 1% to $48.71 on Friday after the farm equipment manufacturer had its rating upgraded to "neutral" from "underweight" by analysts at JPMorgan (JPM) - Get Report on Friday.
The firm believes that the company's focus on selling three-year lease programs and extended warranties will allow it to keep earnings flat this year, outperforming its larger rivals in the sector.
TheStreet Ratings team rates AGCO CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate AGCO CORP (AGCO) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The current debt-to-equity ratio, 0.30, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that AGCO's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
- AGCO, with its decline in revenue, slightly underperformed the industry average of 3.5%. Since the same quarter one year prior, revenues slightly dropped by 9.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- AGCO CORP's earnings per share declined by 17.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, AGCO CORP increased its bottom line by earning $6.01 versus $5.29 in the prior year. For the next year, the market is expecting a contraction of 19.7% in earnings ($4.83 versus $6.01).
- The gross profit margin for AGCO CORP is currently lower than what is desirable, coming in at 25.14%. Regardless of AGCO's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.11% trails the industry average.
- You can view the full analysis from the report here: AGCO Ratings Report
EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he and Stephanie Link think could be potentially HUGE winners. Click here to see the holdings for FREE.