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AGCO Corp. AGCO informed that it completed the previously announced joint venture contract with Trimble TRMB. The JV, PTx Trimble, is now a new company with an 85% stake in AGCO and a 15% stake in Trimble. PTx Trimble's formation increases the overall technology offering of AGCO focused on guidance, autonomy, precision spraying, associated farming, data management and sustainability.

The JV will benefit from Trimble's precision agriculture business and AGCO's JCA Technologies. PTx Trimble will give farmers wider access to next-generation precision agriculture equipment, regardless of the brands of tractors and implements they use.

AGCO financed the deal with $1.1 billion of previously issued senior unsecured notes, a $500-million term-loan facility, other borrowings and cash on hand.

The PTx Trimble JV will be integrated into AGCO's financial statements. The closing of the deal is projected to be accretive to AGCO's revenue growth, adjusted operating margin profile and adjusted earnings per share in the first full year of its completion .

AGCO's consolidated precision agriculture revenues are estimated to approach $2 billion by 2028.

The company delivered an adjusted EPS of $3.78 in fourth-quarter 2023 compared with the prior-year quarter’s $4.47. The reported figure missed the Zacks Consensus Estimate of $4.03.

Revenues decreased 2.5% year over year to $3.8 billion in the December-end quarter. The top line missed the Zacks Consensus Estimate of $4.06 billion. Excluding the favorable currency-translation impacts of 1.8%, net sales fell 4.3% year over year.

The company’s shares have lost 4.7% in the past year compared with the industry’s decline of 6.6%.

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Zacks Rank and Stocks to Consider

AGCO Corp currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are Proto Labs, Inc. PRLB and Applied Industrial Technologies AIT. PRLB currently sports a Zacks Rank #1 (Strong Buy) and AIT carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Proto Labs’ 2024 earnings is pegged at $1.62 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days and suggests year-over-year growth of 1.9%. The company has a trailing four-quarter average earnings surprise of 42.2%. PRLB shares have gained 15.7% in the past year.

Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 43.3% in the past year.

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