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3 Farm Equipment Stocks to Watch Amid Industry Challenges
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Despite weak commodity prices marring the near term outlook of the Zacks Manufacturing - Farm Equipment industry, it will benefit from increased agricultural equipment demand to meet the food requirements of a growing population. Deere & Company (DE - Free Report) , Kubota (KUBTY - Free Report) and CNH Industrial (CNH - Free Report) are well-positioned to capitalize on these opportunities through expanded product portfolios and technological advancements.
Farmers are increasingly adopting automation, precision agriculture and digital solutions to improve productivity, optimize costs and maximize returns, prompting these companies to accelerate investments in smart farming technologies.
About the Industry
The Zacks Manufacturing - Farm Equipment industry comprises companies that manufacture agricultural equipment. These equipment 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. Deere, CNH Industrial and Kubota are presently the top three global manufacturers of agricultural equipment (in that order).
Trends Shaping the Future of the Manufacturing - Farm Equipment Industry
Farm Pressures Weigh on Demand, Future Growth Intact: Corn and soybean prices have weakened recently, as the rapidly advancing U.S. harvest and expectations for record crops weighed on prices. Wheat prices have declined more sharply, hitting a four-month low amid ample global supply expectations and easing concerns over Black Sea grain shipments. The U.S. Department of Agriculture (USDA) forecasts a 2.6% year-over-year dip in net farm income to $158.4 billion for 2026. Production expenses are expected to rise 4.5% to $492.8 billion in 2026. This includes an increase in livestock/poultry purchases, fertilizer, lime, soil conditioner expenses and fuel and oil expenses. Lower farm profitability could pressure farmers’ purchasing power and lead to delayed equipment purchases, creating near-term headwinds for manufacturers. However, long-term demand prospects remain supported by rising global food consumption, population growth and increasing farm sizes. Labor shortages and rising wage costs are also encouraging farmers to adopt mechanization and invest in equipment that improves productivity and operational efficiency.
Pricing, Cost-Cutting Actions to Boost Margins: Farm equipment manufacturers continue to face margin pressures from elevated labor, freight, fuel and raw material costs, along with ongoing supply-chain challenges. Changes in U.S. trade policies and retaliatory measures from other countries have increased costs for imported components and created additional uncertainty across the agriculture and construction equipment markets. Geopolitical developments, including disruptions related to the Iran conflict, have further strained supply chains and added to cost inflation. To counter these pressures, industry participants are implementing pricing strategies, optimizing sourcing networks, improving manufacturing efficiency and pursuing cost-reduction initiatives. These actions, along with better supply-chain management and operational discipline, are expected to support profitability despite a challenging cost environment.
Technologically Advanced Machinery Continues to Gain Popularity: Manufacturers are investing in technologically advanced machinery equipped with connectivity, autonomous capabilities and data-driven tools to address evolving customer needs. Precision agriculture solutions enable farmers to optimize input usage, improve yields and enhance sustainability while lowering overall costs. As labor availability remains a challenge and the need for higher agricultural productivity increases, demand for smart farming technologies and automated equipment is expected to remain a key growth driver for the industry.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Manufacturing - Farm Equipment industry is part of the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #210, which places it at the bottom 15% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dim prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Despite the bleak near-term prospects of the industry, we will present a few Manufacturing - Farm Equipment stocks that can be retained in one’s portfolio. It is worth taking a look at the industry’s stock-market performance and valuation picture before that.
Industry Outperforms Sector and S&P 500
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 gained 32% in the past 12 months compared with the S&P 500’s growth of 13.2%. The Industrial Products sector has gained 8% in the said time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing EV/EBITDA ratio, which is a commonly used multiple for valuing farm equipment stocks, we see that the industry is currently trading at 32.84X compared with the S&P 500’s 17.88X. The Industrial Products sector’s trailing 12-month EV/EBITDA is 18.66X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Over the last five years, the industry traded as high as 36.04X and as low as 14.16X, the median being 20.33X.
3 Manufacturing - Farm Equipment Stocks to Keep an Eye on
Kubota: The company reported an 18% increase in revenues for the Farm & Industrial Machinery segment for the six-month period ended June 30, 2026. Domestic revenues rose 13% while overseas revenues increased 19%. North America's construction equipment market remained strong on infrastructure spending and private construction demand, though residential tractor demand softened. Management expects segment revenues to grow in 2026, supported by robust North American construction equipment demand, recovery in Europe and Thailand, and continued strength in India. Kubota recently acquired a site for a new plant in India to expand production capacity for tractors to capitalize on the growing demand in the country. Kubota recently announced that it will launch the new Agri Robo Tractor MR Series in April 2027 in Japan. These are the first domestically manufactured tractors capable of unmanned autonomous operation under remote monitoring.
The Zacks Consensus Estimate for Osaka, Japan-based Kubota’s earnings for fiscal 2026 has moved up 0.8% over the past 60 days and is pegged at $7.72 per share. The estimate suggests year-over-year growth of 41.1%. The company has a trailing four-quarter earnings surprise of 41.7%, on average. It has an estimated long-term earnings growth rate of 10% and currently carries a Zacks Rank #2 (Buy).
Deere: The company will continue to benefit from its strong focus on launching technologically advanced products and feature-rich solutions that strengthen its competitive positioning. Expansion in precision agriculture remains a key growth catalyst, while replacement demand driven by the need to upgrade aging equipment should continue to support revenues. Deere’s exposure to the construction equipment market also positions it well to benefit from infrastructure spending, healthy rental activity and robust demand from projects such as data centers. Optimizing its cost structure through efficiency initiatives and footprint adjustments, while leveraging pricing actions and its Smart Industrial strategy to offset input cost pressures over time, is also a smart move. Deere acquired construction technology company Tenna, adding mixed-fleet operations and asset tracking capabilities that can integrate with its broader digital ecosystem. The company’s earlier purchase of intellectual property for tree planting equipment from Risutec also supports its precision forestry portfolio and aligns with longer-term sustainability and automation priorities.
The Zacks Consensus Estimate for the Moline, IL-based company’s fiscal 2026 earnings has remained unchanged over the past 60 days at $18.11. DE has a trailing four-quarter earnings surprise of 11.1%, on average. The company currently has an estimated long-term earnings growth rate of 15.1% and carries a Zacks Rank #3 (Hold).
Price & Consensus: DE
CNH Industrial: The company delivered year-over-year revenue growth in the second quarter of 2026 while advancing its strategic priorities, including quality, sourcing, operational efficiency and dealer network consolidation. Although farmer economics remain under pressure, the company highlighted encouraging equipment-cycle trends, such as normalized dealer inventories, an aging fleet and a healthier balance between new and used equipment pricing. CNH continues to support its dealers and customers while investing in equipment and technology to strengthen its competitive position through the next cycle. It is expanding its Precision Technology portfolio through investments in automation, autonomy, digital tools, alternative fuels and electrification. The company is also enhancing its FieldOps platform and integrating Raven technology into newer machines for seamless connectivity. New product launches, feature upgrades and portfolio enhancements, along with ongoing operational efficiency initiatives, are expected to aid growth.
The Zacks Consensus Estimate for CNH Industrial’s fiscal 2026 earnings has remained unchanged over the past 60 days at 45 cents per share. CNH has a trailing four-quarter earnings surprise of around 13%, on average. CNH Industrial carries a Zacks Rank of 3.
View the Zacks #1 Rank List
Image: Bigstock
3 Farm Equipment Stocks to Watch Amid Industry Challenges
Despite weak commodity prices marring the near term outlook of the Zacks Manufacturing - Farm Equipment industry, it will benefit from increased agricultural equipment demand to meet the food requirements of a growing population. Deere & Company (DE - Free Report) , Kubota (KUBTY - Free Report) and CNH Industrial (CNH - Free Report) are well-positioned to capitalize on these opportunities through expanded product portfolios and technological advancements.
Farmers are increasingly adopting automation, precision agriculture and digital solutions to improve productivity, optimize costs and maximize returns, prompting these companies to accelerate investments in smart farming technologies.
About the Industry
The Zacks Manufacturing - Farm Equipment industry comprises companies that manufacture agricultural equipment. These equipment 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. Deere, CNH Industrial and Kubota are presently the top three global manufacturers of agricultural equipment (in that order).
Trends Shaping the Future of the Manufacturing - Farm Equipment Industry
Farm Pressures Weigh on Demand, Future Growth Intact: Corn and soybean prices have weakened recently, as the rapidly advancing U.S. harvest and expectations for record crops weighed on prices. Wheat prices have declined more sharply, hitting a four-month low amid ample global supply expectations and easing concerns over Black Sea grain shipments. The U.S. Department of Agriculture (USDA) forecasts a 2.6% year-over-year dip in net farm income to $158.4 billion for 2026. Production expenses are expected to rise 4.5% to $492.8 billion in 2026. This includes an increase in livestock/poultry purchases, fertilizer, lime, soil conditioner expenses and fuel and oil expenses. Lower farm profitability could pressure farmers’ purchasing power and lead to delayed equipment purchases, creating near-term headwinds for manufacturers. However, long-term demand prospects remain supported by rising global food consumption, population growth and increasing farm sizes. Labor shortages and rising wage costs are also encouraging farmers to adopt mechanization and invest in equipment that improves productivity and operational efficiency.
Pricing, Cost-Cutting Actions to Boost Margins: Farm equipment manufacturers continue to face margin pressures from elevated labor, freight, fuel and raw material costs, along with ongoing supply-chain challenges. Changes in U.S. trade policies and retaliatory measures from other countries have increased costs for imported components and created additional uncertainty across the agriculture and construction equipment markets. Geopolitical developments, including disruptions related to the Iran conflict, have further strained supply chains and added to cost inflation. To counter these pressures, industry participants are implementing pricing strategies, optimizing sourcing networks, improving manufacturing efficiency and pursuing cost-reduction initiatives. These actions, along with better supply-chain management and operational discipline, are expected to support profitability despite a challenging cost environment.
Technologically Advanced Machinery Continues to Gain Popularity: Manufacturers are investing in technologically advanced machinery equipped with connectivity, autonomous capabilities and data-driven tools to address evolving customer needs. Precision agriculture solutions enable farmers to optimize input usage, improve yields and enhance sustainability while lowering overall costs. As labor availability remains a challenge and the need for higher agricultural productivity increases, demand for smart farming technologies and automated equipment is expected to remain a key growth driver for the industry.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Manufacturing - Farm Equipment industry is part of the broader Zacks Industrial Products sector. The industry currently carries a Zacks Industry Rank #210, which places it at the bottom 15% of 247 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dim prospects in the near term. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Despite the bleak near-term prospects of the industry, we will present a few Manufacturing - Farm Equipment stocks that can be retained in one’s portfolio. It is worth taking a look at the industry’s stock-market performance and valuation picture before that.
Industry Outperforms Sector and S&P 500
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 gained 32% in the past 12 months compared with the S&P 500’s growth of 13.2%. The Industrial Products sector has gained 8% in the said time frame.
One-Year Price Performance
Industry's Current Valuation
On the basis of the trailing EV/EBITDA ratio, which is a commonly used multiple for valuing farm equipment stocks, we see that the industry is currently trading at 32.84X compared with the S&P 500’s 17.88X. The Industrial Products sector’s trailing 12-month EV/EBITDA is 18.66X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Enterprise Value/EBITDA (EV/EBITDA) Ratio (TTM)
Over the last five years, the industry traded as high as 36.04X and as low as 14.16X, the median being 20.33X.
3 Manufacturing - Farm Equipment Stocks to Keep an Eye on
Kubota: The company reported an 18% increase in revenues for the Farm & Industrial Machinery segment for the six-month period ended June 30, 2026. Domestic revenues rose 13% while overseas revenues increased 19%. North America's construction equipment market remained strong on infrastructure spending and private construction demand, though residential tractor demand softened. Management expects segment revenues to grow in 2026, supported by robust North American construction equipment demand, recovery in Europe and Thailand, and continued strength in India. Kubota recently acquired a site for a new plant in India to expand production capacity for tractors to capitalize on the growing demand in the country. Kubota recently announced that it will launch the new Agri Robo Tractor MR Series in April 2027 in Japan. These are the first domestically manufactured tractors capable of unmanned autonomous operation under remote monitoring.
The Zacks Consensus Estimate for Osaka, Japan-based Kubota’s earnings for fiscal 2026 has moved up 0.8% over the past 60 days and is pegged at $7.72 per share. The estimate suggests year-over-year growth of 41.1%. The company has a trailing four-quarter earnings surprise of 41.7%, on average. It has an estimated long-term earnings growth rate of 10% and currently carries a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Price & Consensus: KUBTY
Deere: The company will continue to benefit from its strong focus on launching technologically advanced products and feature-rich solutions that strengthen its competitive positioning. Expansion in precision agriculture remains a key growth catalyst, while replacement demand driven by the need to upgrade aging equipment should continue to support revenues. Deere’s exposure to the construction equipment market also positions it well to benefit from infrastructure spending, healthy rental activity and robust demand from projects such as data centers. Optimizing its cost structure through efficiency initiatives and footprint adjustments, while leveraging pricing actions and its Smart Industrial strategy to offset input cost pressures over time, is also a smart move. Deere acquired construction technology company Tenna, adding mixed-fleet operations and asset tracking capabilities that can integrate with its broader digital ecosystem. The company’s earlier purchase of intellectual property for tree planting equipment from Risutec also supports its precision forestry portfolio and aligns with longer-term sustainability and automation priorities.
The Zacks Consensus Estimate for the Moline, IL-based company’s fiscal 2026 earnings has remained unchanged over the past 60 days at $18.11. DE has a trailing four-quarter earnings surprise of 11.1%, on average. The company currently has an estimated long-term earnings growth rate of 15.1% and carries a Zacks Rank #3 (Hold).
Price & Consensus: DE
CNH Industrial: The company delivered year-over-year revenue growth in the second quarter of 2026 while advancing its strategic priorities, including quality, sourcing, operational efficiency and dealer network consolidation. Although farmer economics remain under pressure, the company highlighted encouraging equipment-cycle trends, such as normalized dealer inventories, an aging fleet and a healthier balance between new and used equipment pricing. CNH continues to support its dealers and customers while investing in equipment and technology to strengthen its competitive position through the next cycle. It is expanding its Precision Technology portfolio through investments in automation, autonomy, digital tools, alternative fuels and electrification. The company is also enhancing its FieldOps platform and integrating Raven technology into newer machines for seamless connectivity. New product launches, feature upgrades and portfolio enhancements, along with ongoing operational efficiency initiatives, are expected to aid growth.
The Zacks Consensus Estimate for CNH Industrial’s fiscal 2026 earnings has remained unchanged over the past 60 days at 45 cents per share. CNH has a trailing four-quarter earnings surprise of around 13%, on average. CNH Industrial carries a Zacks Rank of 3.
Price & Consensus: CNH