AGCO Corporation's (NYSE:AGCO) Business And Shares Still Trailing The Market
AGCO Corporation's (NYSE:AGCO) Business And Shares Still Trailing The Market
With a price-to-earnings (or "P/E") ratio of 7.5x AGCO Corporation (NYSE:AGCO) may be sending very bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios greater than 17x and even P/E's higher than 32x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so limited.
With its earnings growth in positive territory compared to the declining earnings of most other companies, AGCO has been doing quite well of late. It might be that many expect the strong earnings performance to degrade substantially, possibly more than the market, which has repressed the P/E. If not, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
Keen to find out how analysts think AGCO's future stacks up against the industry? In that case, our free report is a great place to start.Is There Any Growth For AGCO?
The only time you'd be truly comfortable seeing a P/E as depressed as AGCO's is when the company's growth is on track to lag the market decidedly.
Retrospectively, the last year delivered an exceptional 31% gain to the company's bottom line. The latest three year period has also seen an excellent 176% overall rise in EPS, aided by its short-term performance. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Shifting to the future, estimates from the analysts covering the company suggest earnings growth is heading into negative territory, declining 4.3% each year over the next three years. With the market predicted to deliver 11% growth per year, that's a disappointing outcome.
In light of this, it's understandable that AGCO's P/E would sit below the majority of other companies. However, shrinking earnings are unlikely to lead to a stable P/E over the longer term. There's potential for the P/E to fall to even lower levels if the company doesn't improve its profitability.
The Final Word
We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
As we suspected, our examination of AGCO's analyst forecasts revealed that its outlook for shrinking earnings is contributing to its low P/E. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. It's hard to see the share price rising strongly in the near future under these circumstances.
Having said that, be aware AGCO is showing 1 warning sign in our investment analysis, you should know about.
You might be able to find a better investment than AGCO. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
由於市盈率(或 “市盈率”)爲7.5倍,愛科公司(紐約證券交易所代碼:AGCO)目前可能發出了非常看漲的信號,因爲美國幾乎有一半公司的市盈率大於17倍,甚至市盈率高於32倍也並不罕見。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率如此有限。
與大多數其他公司的收益下降相比,愛科的收益增長處於正值區間,因此愛科最近表現良好。許多人可能預計,強勁的盈利表現將大幅下降,可能超過抑制市盈率的市場。否則,現有股東有理由對股價的未來走向持相當樂觀的態度。
想了解分析師如何看待愛科的未來與行業的對立嗎?在這種情況下,我們的免費報告是一個很好的起點。愛科有增長嗎?
只有當公司的增長有望明顯落後於市場時,你才能真正放心地看到像愛科一樣低迷的市盈率。
回顧過去,去年的公司利潤實現了31%的驚人增長。在短期表現的推動下,最近三年期間,每股收益總體增長了176%。因此,可以公平地說,該公司最近的收益增長非常好。
展望未來,報道該公司的分析師的估計表明,收益增長將進入負值區間,未來三年每年下降4.3%。預計市場每年將實現11%的增長,這是一個令人失望的結果。
有鑑於此,愛科的市盈率將低於其他大多數公司是可以理解的。但是,從長遠來看,收益萎縮不太可能帶來穩定的市盈率。如果公司不提高盈利能力,市盈率有可能降至更低的水平。
最後一句話
我們可以說,市盈率的力量主要不是作爲估值工具,而是衡量當前投資者情緒和未來預期。
正如我們所懷疑的那樣,我們對愛科分析師預測的審查顯示,其收益萎縮的前景是其低市盈率的原因。在現階段,投資者認爲,收益改善的可能性不足以證明提高市盈率是合理的。在這種情況下,很難看到股價在不久的將來強勁上漲。
話雖如此,請注意,愛科在我們的投資分析中顯示了一個警告信號,你應該知道。
你也許能找到比愛科更好的投資。如果你想選擇可能的候選人,可以免費查看這份有趣的公司名單,這些公司的市盈率很低(但已經證明可以增加收益)。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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