Why Deere & Company (DE) Investors Are Dumping Shares Today


Deere & Company (NYSE:DE) reported fiscal third-quarter EPS of $1.97, which exceeded the consensus estimate of $1.93. The new guidance of 2017 is for full-year equipment sales to increase 10% and fourth-quarter equipment sales to improve 24%; net income guidance of $2.075 billion implies EPS between $6.40 and $6.42. This compares with the consensus of $6.38.

However, with expectations somewhat elevated into the print, the report is viewed as a bit of a disappointment, especially considering the first two quarters of exceptional results. Also, there is starting to be growing concern that the ag markets will stall given crop prices. As such, Deere investors are running for the hills, sending shares down nearly 5% to $117.19 in Friday’s trading session.

On the ratings front, DE has been the subject of a number of recent research reports. In a report issued on August 16, BMO analyst Joel Tiss maintained a Buy rating on DE, with a price target of $150, which implies an upside of 30% from current levels. On August 8, Jefferies’ Stephen Volkmann reiterated a Hold rating on the stock and has a price target of $125.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Joel Tiss and Stephen Volkmann have a yearly average return of 7.2% and 17.2% respectively. Tiss has a success rate of 54% and is ranked #739 out of 4614 analysts, while Volkmann has a success rate of 72% and is ranked #59.

Overall, one research analyst has rated the stock with a Sell rating, 5 research analysts have assigned a Hold rating and 5 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $144.14 which is 25% above where the stock opened today.

Deere & Co. manufactures and distributes a complete line of equipment used in agriculture, construction, forestry and turf care. It also manufactures engines and other power train components. The firm also provides credit and other services to customers around the world. It operates its business through the following segments: Agriculture & Turf, Construction & Forestry and Financial Services. 

 

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