Bank of America Reiterates on AGCO Despite More Cautious View on Sector

In a report published Friday, Bank of America analyst Ross Gilardi reiterated a Buy rating and $69.00 price target on AGCO AGCO. In the report, Bank of America noted, “We reiterate our Buy rating on AGCO today despite a more cautious view on the farm equipment sector. We highlight 1) lowest P/E at 9.1x 2014 versus 10.9x for DE and 12.6x for CNH, 2) minimal exposure to large US combines and tractors (10-15% of sales), 3) counter-cyclicality of GSI, 4) zero construction equipment exposure, 5) heavy insider buying reaccelerates, 6) $1.00+ of EPS self-help into 2015, and 6) opportunity for a meaningful step-up in the dividend given strength of the balance sheet and greater flexibility to repatriate cash from Europe in 2014.” AGCO closed on Thursday at $57.47.