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3 Farm Equipment Stocks to Watch Amid Improving Industry Trends
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The Zacks Manufacturing - Farm Equipment industry is set to benefit from increased agricultural equipment demand to meet the food requirements of a growing population.
Industry players like CNH Industrial N.V. (CNH - Free Report) , AGCO Corporation (AGCO - Free Report) and Lindsay Corporation (LNN - Free Report) are well-poised to benefit from this demand by expanding their product offerings. The industry’s emphasis on revolutionizing agriculture with technology to automate farming is expected to be a major catalyst. The players are thus investing heavily in upping their technology game.
About the Industry
The Zacks Manufacturing - Farm Equipment industry comprises companies that manufacture agricultural equipment. These include tractors, combines, cotton pickers and harvesting equipment; tillage, seeding and application equipment, consisting of sprayers, nutrient management and soil preparation machinery; and hay and forage equipment, comprising self-propelled forage harvesters and attachments, balers and mowers. Some companies in the industry produce turf and utility equipment, consisting of riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, commercial mowing equipment, and garden tillers and snow throwers. Some participants manufacture irrigation equipment. The industry players sell their equipment and related parts through independent retail dealer networks and retail outlets. This industry caters to agriculture, golf and landscape markets.
Trends Shaping the Future of the Manufacturing - Farm Equipment Industry
Food Demand to Sustain Growth Despite Current Weak Commodity Prices: The U.S. Department of Agriculture forecasts a 29.5% year-over-year increase in net farm income to $180.1 billion for 2025. This projects an improved scenario, considering the declines in the past two years. However, the increase in net farm income this year will be mainly due to the $33.1-billion year-over-year increase in direct government farm payments to $42.4 billion. Meanwhile, total crop receipts are forecast to decrease 2.3% from the 2024 level due to lower soybean and corn prices. Uncertainty over demand in China for U.S. soybeans due to the escalating tensions between these two countries will continue to weigh on soybean prices. Corn prices have declined 1.5% year to date.
Despite the ongoing volatility in commodity prices and lower crop receipts, agricultural equipment demand will continue to be supported by increased global demand for food, stemming from population growth and an increasing proportion of the population aspiring for better living standards. In the United States, the agricultural machinery market is forecast to reach $42.05 billion in 2025 and grow to $57.08 billion in 2030, seeing a compound annual growth rate (CAGR) of 6.3%. With farm sizes increasing, there is a greater need for labor, but escalating labor costs are prompting farmers to turn to mechanization. Moreover, subsidies on agricultural machinery purchases are enabling even small-scale farmers to invest in equipment.
Pricing, Cost-Cutting Actions to Boost Margins: The industry has not been immune to the rampant cost inflation prevailing in the sector. Constraints on the availability of raw materials, labor and trucking resources have led to higher lead times for deliveries. However, the industry players have recently been reporting improvements in the supply chain. The imposition of tariffs adds to the headwinds. The companies have been implementing pricing and cost-reduction actions, which are likely to help sustain margins.
Technologically Advanced Machinery Gaining Popularity: Customers are increasingly relying on advanced technology, smart farming solutions and mechanization to run their operations. Thus, the industry participants are enhancing investments in launching products equipped with advanced technologies and features to keep up with customers' evolving demands. Precision agriculture technology is expected to be a key catalyst, as it enables farmers to increase yield with reduced input costs and sustainability benefits. CNH and AGCO are currently the forerunners in this context.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Manufacturing - Farm Equipment industry is part of the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #104, which places it in the top 42% of the 245 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright prospects for the near term. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock market performance and valuation.
Industry vs. Broader Market
The Zacks Manufacturing - Farm Equipment industry has outperformed its sector and the Zacks S&P 500 composite over the past 12 months. Stocks in this industry have grown 29.8% in the past 12 months compared with the S&P 500’s growth of 16.9%. The Industrial Products sector has risen 12.3% in the said time frame.
1-Year Price Performance
Industry's Current Valuation
On the basis of the forward EV/EBITDA ratio, which is a commonly used multiple for valuing farm equipment stocks, we see that the industry is currently trading at 50.53X compared with the S&P 500’s 13.76X. The Industrial Products sector’s forward 12-month EV/EBITDA is 20.43X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (F12M)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (F12M)
Over the last five years, the industry traded as high as 56.43X and as low as 21.11X, the median being 27.64X.
3 Manufacturing - Farm Equipment Stocks to Keep an Eye on
AGCO: The company has been gaining from increasing replacement demand for old equipment. It has been investing in products, precision farming technology, and smart farming solutions to improve distribution and enhance digital capabilities to strengthen product offerings. These efforts and the company’s cost-control measures have driven margin expansion over the past few quarters. AGCO is focusing on strategic transformation. It intends to streamline and focus its portfolio of agricultural machinery and precision agriculture technology solutions. In line with this, it has formed PTx, which integrates the precision agriculture technology from AGCO's tech stack's pillars, Precision Planting and its most recent joint venture, PTx Trimble. This move will facilitate AGCO’s rapid growth in technology transformation and provide seamlessly compatible, powerfully simple precision ag solutions. The company expects to negate tariff impacts with planned mitigation actions. It intends to mitigate lower sales volumes with cost controls and stable engineering expenses. Shares of the company have gained 25.9% in the past year.
AGCO has an estimated long-term earnings growth rate of 13.1%. This Duluth, GA-based company currently sports a Zacks Rank #1 (Strong Buy). The consensus estimate for AGCO’s 2025 earnings has moved up 14% in the past 60 days.
Lindsay: The company acquired a 49.9% minority interest in Pessl Instruments GmbH in January 2025. This will help accelerate innovations in water management and increase LNN’s global reach. Project opportunities in developing international irrigation markets continue to be robust, driven by food security and water scarcity concerns. The $110-billion funding under the Infrastructure Investment and Jobs Act for roads, bridges and other transportation projects is expected to translate into higher demand for Lindsay. LNN is also well-poised to gain from the demand for its Road Zipper System. The system is a highly differentiated product that addresses key infrastructure needs, such as reducing congestion, lowering carbon emissions, improving commuter travel time and increasing driver safety. Road Zipper Systems are gaining popularity globally for their faster implementation and lower costs than constructing lanes. Shares of the company have gained 13.6% in the past year.
The Omaha, NE-based company has a trailing four-quarter earnings surprise of 22.4%, on average. It currently carries a Zacks Rank #3 (Hold). The consensus estimate for LNN’s fiscal 2025 earnings has moved up 1% in the past 60 days. The estimated figure indicates an increase of 13.6% from the prior year’s reported figure.
Price & Consensus: LNN
CNH Industrial: The company is well-poised for growth, backed by its state-of-the-art and productivity-boosting agricultural product portfolio. It is developing several products and technologies across all segments to remain on par with the latest technological advancements and emission-control procedures. The company is advancing in automation, autonomy, digital tech, alternative fuels and electrification to solidify its position in the Precision Technology space. Recent tractor and combine launches with in-house digital systems have strengthened the company’s competitive edge. In 2024, 80% of precision components were developed internally. This is expected to rise in 2025 due to more factory-installed solutions and growing use of proprietary retrofit kits, boosting market share and margins. CNH’s cost-reduction programs focused on product costs and selling, general and administrative expenses will help sustain margins.
The Basildon, U.K.-based company currently carries a Zacks Rank #3. Shares of the company have gained 20.1% in a year. CNH surpassed earnings estimates in the last two quarters.
Price & Consensus: CNH
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3 Farm Equipment Stocks to Watch Amid Improving Industry Trends
The Zacks Manufacturing - Farm Equipment industry is set to benefit from increased agricultural equipment demand to meet the food requirements of a growing population.
Industry players like CNH Industrial N.V. (CNH - Free Report) , AGCO Corporation (AGCO - Free Report) and Lindsay Corporation (LNN - Free Report) are well-poised to benefit from this demand by expanding their product offerings. The industry’s emphasis on revolutionizing agriculture with technology to automate farming is expected to be a major catalyst. The players are thus investing heavily in upping their technology game.
About the Industry
The Zacks Manufacturing - Farm Equipment industry comprises companies that manufacture agricultural equipment. These include tractors, combines, cotton pickers and harvesting equipment; tillage, seeding and application equipment, consisting of sprayers, nutrient management and soil preparation machinery; and hay and forage equipment, comprising self-propelled forage harvesters and attachments, balers and mowers. Some companies in the industry produce turf and utility equipment, consisting of riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, commercial mowing equipment, and garden tillers and snow throwers. Some participants manufacture irrigation equipment. The industry players sell their equipment and related parts through independent retail dealer networks and retail outlets. This industry caters to agriculture, golf and landscape markets.
Trends Shaping the Future of the Manufacturing - Farm Equipment Industry
Food Demand to Sustain Growth Despite Current Weak Commodity Prices: The U.S. Department of Agriculture forecasts a 29.5% year-over-year increase in net farm income to $180.1 billion for 2025. This projects an improved scenario, considering the declines in the past two years. However, the increase in net farm income this year will be mainly due to the $33.1-billion year-over-year increase in direct government farm payments to $42.4 billion. Meanwhile, total crop receipts are forecast to decrease 2.3% from the 2024 level due to lower soybean and corn prices. Uncertainty over demand in China for U.S. soybeans due to the escalating tensions between these two countries will continue to weigh on soybean prices. Corn prices have declined 1.5% year to date.
Despite the ongoing volatility in commodity prices and lower crop receipts, agricultural equipment demand will continue to be supported by increased global demand for food, stemming from population growth and an increasing proportion of the population aspiring for better living standards. In the United States, the agricultural machinery market is forecast to reach $42.05 billion in 2025 and grow to $57.08 billion in 2030, seeing a compound annual growth rate (CAGR) of 6.3%. With farm sizes increasing, there is a greater need for labor, but escalating labor costs are prompting farmers to turn to mechanization. Moreover, subsidies on agricultural machinery purchases are enabling even small-scale farmers to invest in equipment.
Pricing, Cost-Cutting Actions to Boost Margins: The industry has not been immune to the rampant cost inflation prevailing in the sector. Constraints on the availability of raw materials, labor and trucking resources have led to higher lead times for deliveries. However, the industry players have recently been reporting improvements in the supply chain. The imposition of tariffs adds to the headwinds. The companies have been implementing pricing and cost-reduction actions, which are likely to help sustain margins.
Technologically Advanced Machinery Gaining Popularity: Customers are increasingly relying on advanced technology, smart farming solutions and mechanization to run their operations. Thus, the industry participants are enhancing investments in launching products equipped with advanced technologies and features to keep up with customers' evolving demands. Precision agriculture technology is expected to be a key catalyst, as it enables farmers to increase yield with reduced input costs and sustainability benefits. CNH and AGCO are currently the forerunners in this context.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Manufacturing - Farm Equipment industry is part of the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #104, which places it in the top 42% of the 245 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bright prospects for the near term. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock market performance and valuation.
Industry vs. Broader Market
The Zacks Manufacturing - Farm Equipment industry has outperformed its sector and the Zacks S&P 500 composite over the past 12 months. Stocks in this industry have grown 29.8% in the past 12 months compared with the S&P 500’s growth of 16.9%. The Industrial Products sector has risen 12.3% in the said time frame.
1-Year Price Performance
Industry's Current Valuation
On the basis of the forward EV/EBITDA ratio, which is a commonly used multiple for valuing farm equipment stocks, we see that the industry is currently trading at 50.53X compared with the S&P 500’s 13.76X. The Industrial Products sector’s forward 12-month EV/EBITDA is 20.43X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (F12M)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (F12M)
Over the last five years, the industry traded as high as 56.43X and as low as 21.11X, the median being 27.64X.
3 Manufacturing - Farm Equipment Stocks to Keep an Eye on
AGCO: The company has been gaining from increasing replacement demand for old equipment. It has been investing in products, precision farming technology, and smart farming solutions to improve distribution and enhance digital capabilities to strengthen product offerings. These efforts and the company’s cost-control measures have driven margin expansion over the past few quarters. AGCO is focusing on strategic transformation. It intends to streamline and focus its portfolio of agricultural machinery and precision agriculture technology solutions. In line with this, it has formed PTx, which integrates the precision agriculture technology from AGCO's tech stack's pillars, Precision Planting and its most recent joint venture, PTx Trimble. This move will facilitate AGCO’s rapid growth in technology transformation and provide seamlessly compatible, powerfully simple precision ag solutions. The company expects to negate tariff impacts with planned mitigation actions. It intends to mitigate lower sales volumes with cost controls and stable engineering expenses. Shares of the company have gained 25.9% in the past year.
AGCO has an estimated long-term earnings growth rate of 13.1%. This Duluth, GA-based company currently sports a Zacks Rank #1 (Strong Buy). The consensus estimate for AGCO’s 2025 earnings has moved up 14% in the past 60 days.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Price & Consensus: AGCO
Lindsay: The company acquired a 49.9% minority interest in Pessl Instruments GmbH in January 2025. This will help accelerate innovations in water management and increase LNN’s global reach. Project opportunities in developing international irrigation markets continue to be robust, driven by food security and water scarcity concerns. The $110-billion funding under the Infrastructure Investment and Jobs Act for roads, bridges and other transportation projects is expected to translate into higher demand for Lindsay.
LNN is also well-poised to gain from the demand for its Road Zipper System. The system is a highly differentiated product that addresses key infrastructure needs, such as reducing congestion, lowering carbon emissions, improving commuter travel time and increasing driver safety. Road Zipper Systems are gaining popularity globally for their faster implementation and lower costs than constructing lanes. Shares of the company have gained 13.6% in the past year.
The Omaha, NE-based company has a trailing four-quarter earnings surprise of 22.4%, on average. It currently carries a Zacks Rank #3 (Hold). The consensus estimate for LNN’s fiscal 2025 earnings has moved up 1% in the past 60 days. The estimated figure indicates an increase of 13.6% from the prior year’s reported figure.
Price & Consensus: LNN
CNH Industrial: The company is well-poised for growth, backed by its state-of-the-art and productivity-boosting agricultural product portfolio. It is developing several products and technologies across all segments to remain on par with the latest technological advancements and emission-control procedures. The company is advancing in automation, autonomy, digital tech, alternative fuels and electrification to solidify its position in the Precision Technology space. Recent tractor and combine launches with in-house digital systems have strengthened the company’s competitive edge. In 2024, 80% of precision components were developed internally. This is expected to rise in 2025 due to more factory-installed solutions and growing use of proprietary retrofit kits, boosting market share and margins. CNH’s cost-reduction programs focused on product costs and selling, general and administrative expenses will help sustain margins.
The Basildon, U.K.-based company currently carries a Zacks Rank #3. Shares of the company have gained 20.1% in a year. CNH surpassed earnings estimates in the last two quarters.
Price & Consensus: CNH