Global agricultural machinery and precision ag technology provider AGCO Corp. (AGCO) has acquired JCA Industries in an effort to boost its development of automated and autonomous machines.
JCA develops autonomous software for use in agricultural machines and related replacement parts.
Management Weighs In
The Chairman, President, and CEO of AGCO, Eric Hansotia commented, “The purchase of JCA is another important addition to our precision agriculture capabilities…JCA is one of the most advanced developers of autonomous machine technologies for off-road OEMs, and this acquisition will accelerate AGCO’s delivery of machine automation and autonomous systems that improve farmer productivity.”
Importantly, the strategic move bolsters AGCO’s engineering and software development expertise.
Moreover, today AGCO is expected to report its first-quarter numbers during market hours. Analysts expect the company to report earnings per share of $1.91. In the comparable year-ago period, AGCO posted earnings per share of $2 versus the Street’s consensus estimate of $1.13.
Analyst’s Take
Oppenheimer analyst Kristen Owen has reiterated a Buy rating on the stock and increased the price target to $169 from $164.
Overall, the Street has a Strong Buy Consensus rating on AGCO based on six Buys and two Holds. The average AGCO price target of $161 implies 25% upside potential from current levels. That’s on top of the nearly 10% share price gain so far in 2022.
Closing Note
This strategic move by AGCO is important as it impacts farming yields. It comes at a time when fertilizer prices are soaring, and countries are resorting to shoring up food reserves in the wake of global shortages and the Russia-Ukraine conflict. The recent ban on the export of palm oil by Indonesia is a case in point.
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