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Agco (AGCO) Moves 3.5% Higher: Will This Strength Last?

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Agco (AGCO) shares soared 3.5% in the last trading session to close at $147.99. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 21% gain over the past four weeks.

AGCO’s price appreciation is driven by escalating agricultural commodity prices, owing to supply concerns as tensions between Russia and Ukraine continues to  escalate. Given the world’s biggest grain exporters at war, the company is well poised to boost U.S agricultural exports.

This farm equipment maker is expected to post quarterly earnings of $1.90 per share in its upcoming report, which represents a year-over-year change of -5%. Revenues are expected to be $2.64 billion, up 10.9% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Agco, the consensus EPS estimate for the quarter has been revised marginally lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on AGCO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Agco is a member of the Zacks Manufacturing - Farm Equipment industry. One other stock in the same industry, Lindsay (LNN), finished the last trading session 0.8% higher at $156.53. LNN has returned 20% over the past month.

Lindsay's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.31. Compared to the company's year-ago EPS, this represents a change of +21.3%. Lindsay currently boasts a Zacks Rank of #3 (Hold).


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