AGCO Corporation (NYSE:AGCO) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 3.0% short of analyst estimates at US$2.9b, and statutory earnings of US$2.25 per share missed forecasts by 3.5%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for AGCO

After the latest results, the consensus from AGCO's 14 analysts is for revenues of US$13.5b in 2024, which would reflect a discernible 3.8% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to fall 18% to US$12.20 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$13.6b and earnings per share (EPS) of US$12.81 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$135, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values AGCO at US$145 per share, while the most bearish prices it at US$112. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting AGCO is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 5.1% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.6% annually for the foreseeable future. It's pretty clear that AGCO's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AGCO. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for AGCO going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - AGCO has 2 warning signs (and 1 which can't be ignored) we think you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.