In a report issued on February 15, Adam Seiden from Barclays maintained a Buy rating on Deere (DE), with a price target of $180. The company’s shares opened today at $156.88.
“We just wouldn’t forecast a fact pattern based on one quarter of demand; plus CNH already warned us, no? Besides, the ~5% price increase DE recognized across its businesses is very strong – a number that we recognize could moderate through the year as Construction laps its y/y gains. Tempering our margins back to the company’s 12% ag guide gets us to <15% incrementals and quarterlies at ~20-30%, a level that's well within DE's means, historically speaking.There's top-line risk into 2H, different than peers. What differentiates DE's ag business vs. others is that the slowdown is not on its own due to end market peaking or in some cases, like mining, a mid-cycle demand pause. Instead, we'd see it as a direct result of the political climate, which does add to risk into 2H19 ( 2/1/19), but we see it longer term more in the areas OK Ag."
According to TipRanks.com, Seiden has currently no stars on a ranking scale of 0-5 stars, with an average return of -9.5% and a 31.0% success rate. Seiden covers the Industrial Goods sector, focusing on stocks such as Lincoln Electric Holdings, Caterpillar, and Terex Corp.
Currently, the analyst consensus on Deere is a Strong Buy with an average price target of $179.70, implying a 14.5% upside from current levels. In a report issued on February 15, Credit Suisse also maintained a Buy rating on the stock with a $209 price target.
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Deere’s market cap is currently $50.63B and has a P/E ratio of 22.05. The company has a Price to Book ratio of 4.49.
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Deere & Co. engages in the manufacture and distribution of equipment used in agriculture, construction, forestry, and turf care. It operates through the following segments: Agriculture and Turf, Construction and Forestry, and Financial Services.