Deere & Co. (DE:NYE) Analysts raise targets on earnings beat

Deere Cuts its 2024 Profit Forecast for the Second Time (Consensus "Buy")

Deere & Company Stock Forecast:

According to the predictions of 23 analysts, the average target price for Deere & Company stock over the next 12 months is USD 460.25. The analysts’ average rating for the stock is “Strong Buy.” Meanwhile, Stock Target Advisor’s analysis of Deere & Company’s stock is “Slightly Bullish,” as they have identified 8 positive signals and 5 negative signals. Deere & Company’s most recent closing stock price was USD 433.31, and it has increased in value by 4.33% over the past week, 5.53% over the past month, and 17.40% over the last year.

Deere & Co. News:

Deere & Co. saw a 7.5% increase in their stock price following the release of their financial results for the first quarter, which exceeded Wall Street’s expectations. The heavy-equipment company reported earnings of $6.55 per share from $11.4 billion in equipment sales, surpassing analysts’ estimates of $5.57 per share from $11 billion in sales. In addition, Deere & Co. raised its financial forecasts for the full year, with the company now expecting net income of between $8.75 billion and $9.25 billion for fiscal 2023, compared to their previous estimate of $8 billion to $8.5 billion in November. Wall Street analysts believe that this positive momentum is just the beginning for Deere & Co.

Analysts Coverage Change:

  • Morgan Stanley & Co. maintains  Deere & Co. (DE:NYE) with an “Overweight” rating and raises the price target to $537 from $522.
  • D. A. Davidson & Co.  maintains with a “Buy” rating and a price target of  $520.
  • Argus Research Company maintains with a “Buy” rating and raises the price target to $485 from $475.
  • Sanford C. Bernstein & Co. maintains with a “Market Perform” rating and raised the price target to $398 from $364.
  • Wells Fargo & Company maintains with an “Overweight” rating and raises the price target to $510 from $485.
  • Robert W. Baird & Co. maintains with an “Outperform” rating and raises the price target to $512 from $500.

Positive Fundamentals:

Deere & Company is a large entity in its sector, with a high market capitalization, which implies more stability. The stock has superior risk-adjusted returns compared to its sector peers for a hold period of at least 12 months, making it a good investment option for investors seeking a stable return. Additionally, the stock has outperformed its sector peers in terms of average annual dividend returns for the past 5 years, indicating a high income yield for investors.

The stock has shown superior return on equity compared to its peers, placing it in the top quartile. The company has had positive total cash flow and total free cash flow in the most recent four quarters, which is a positive indication of the company’s financial health.

The stock has also demonstrated top quartile earnings and revenue growth in the previous 5 years compared to its sector, suggesting that the company is growing at a faster rate than its peers. These growth rates are positive indicators for investors who seek long-term capital appreciation.

Negative Fundamentals:

The stock is overpriced compared to its book value and is trading higher than its peers on a price to book value basis. The stock is overpriced compared to its peers on a price to cash flow basis and is priced above the median for its sector.

The company is highly leveraged and in the bottom half compared to its sector peers on debt to equity. However, it’s important to investigate further to understand if the high leverage is due to an aggressive growth strategy or if it could be a cause for concern.

The stock is overpriced compared to its peers on a price to free cash flow basis, which could be another potential warning sign. Lastly, the company has shown below-median dividend growth in the previous 5 years compared to its sector.

Overall, these factors suggest that caution should be exercised when considering investing in this particular stock. It’s important to conduct thorough research, including examining the company’s financial statements and management statements, to fully understand the company’s financial health and growth potential before making a decision.

FA Score (Fundamental Analysis):

The fundamental analysis of Deere & Co. is “Slightly Bullish” with a FA score of 6.2 out of 10, where 0 is very bearish and 10 is very bullish.

 

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