$AGCO,$DE,...Agco earns an upgrade at J.P. Morgan, Deere still underwhelms
J.P. Morgan upgrades AGCO (AGCO +1%) shares to Neutral from Underweight, as downside risks are priced into the stock at current levels, but remains bearish on rival farm manufacturer Deere (DE -0.3%).
Because of its weaker market share in the row crop sector, AGCO did not participate in rolling programs or multiple unit discount programs in recent years, and the GSI business is benefiting from the lack of grain storage capacity as well as the recovery in protein sector fundamentals; the firm thinks the combination should result in AGCO's earnings being roughly flat in 2015, outperforming peers.
JPM remains Underweight on DE as it awaits a trough in demand, which may not occur until FY 2016.
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