If you only looked at used farm equipment prices, you probably wouldn’t expect to see that farm equipment stocks have been weak. While an over-aged equipment base in North America and supply chain-driven production challenges have sent used equipment to record highs (as per Machinery Pete’s quarterly index), AGCO (AGCO) and CNH Industrial (CNHI) shares are down from the time of my last article on CNH, and Deere (DE) is barely positive and may well be in the red too by the time this is published.
I understand concerns about higher rates, supply chain issues, and now the Russian invasion of Ukraine, but with a strong outlook for ag equipment demand over the next couple of years, I’m honestly surprised that CNH shares haven’t held up better, particularly with the spin off of IVECO (IVCGF) complete. While conservative guidance from the recent investor day doesn’t help near-term sentiment, and geopolitical risk is now front and center, I do believe that CNH shares are worth another look even in a weak environment for sentiment on machinery stocks.
Read more here:
CNH Industrial Undervalued With Strong Ag Demand Likely To Persist
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