Caterpillar, Deere, AGCO: Top machinery stocks from Truist

Truist named Caterpillar (CAT), Deere & Company (DE), and AGCO Corporation (AGCO), among others, stock picks ripe for upside. Analyst Jamie Cook initiated coverage of these stocks with a Buy rating, claiming the sector may have surprising growth in the second half of the year.

Yahoo Finance Anchors Josh Lipton and Julie Hyman discuss why these companies' earnings are proving more resilient.

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Editor's note: This article was written by Nicholas Jacobino

Video transcript

JULIE HYMAN: This time it's actually sort of a collection of calls this time from Truist who says some machinery stocks could be in for some upside moves in the months to come. Analyst Jamie Cook today launching coverage of nine companies rating Caterpillar, Deere, AGCO a buy among others here and saying that growth in the sector could surprise folks in the second half of the year in a positive way. She wrote, the group's in a unique situation. Earnings are proving more resilient despite channel destocking, she wrote, and softening demand trends. And that's helped by backlogs near record levels.

JOSH LIPTON: Yeah, you look at some of these names, Julie, there hasn't been a ton of investor enthusiasm for at least some of them. But of course, you know, listen, for a bull, that's a great entry point. I thought her take here was interesting too. Looking ahead, she says, constructive on the group as she believes broad-based industrial growth could surprise on the upside in the second half of this year. We'll see.

JULIE HYMAN: Yeah and she's got some pretty lofty price targets for these guys.