Deere (DE) Looks to Ease Trade Concerns With Q3 Report

What's Happening With DE View more about DE >

Heavy machinery marker Deere & Co. (DE) will release its fiscal third-quarter numbers before the market open August 16. Analysts forecast earnings of $2.81 per share, up from $2.59 during the same period last year. DE stock is up a modest 3.7% on the year.

Technical Analysis

DE stock was recently trading at $154.75 down $16.47 from its 12-month high and $26.43 above its 12-month low. InvestorsObserver’s Stock Score Report gives DE a 70 long-term technical score and a 60 short-term technical score. The stock has recent support above $147.5 and recent resistance below $165. Of the 15 analysts who cover the stock 8 rate it Strong Buy, 2 rate it Buy, 4 rate it Hold, 0 rate it Sell, and 1 rate it Strong Sell, DE gets a score of 62 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

DE stock was trading at its 52-week high and approaching its all time high before trade worries drove the overall market lower the last couple of weeks. Deere is very sensitive to the ongoing trade war as U.S. farmers have been a target of the Chinese in their attempt to put pressure on President Trump in retaliation to tariffs placed on Chinese imports. As expectations rose that trade negotiations would lead to a trade deal the stock showed strength but quickly reversed as new tariffs were announced by the U.S. and China allowed its currency to devalue to levels not hit over the last 10 years. Growth is ok with earnings expected to rise 9% this year and 16.5% per annum over the next five years, but the trade war will continue to keep pressure on the stock as market volatility increases due to uncertainty of how big an impact the trade war will have on global economic growth. There is a lot of negativity priced into farm related sectors at this time, and DE is currently trading at just 13 times future earnings as a result. A strong set of numbers would help the stock erase some of its recent losses, but trade war headlines will likely drive the stock through the remainder of the year. Analysts have an average price target of $170.17 on the stock.

About Deere & Company

Deere is the world's leading manufacturer of agricultural equipment with approximately $35 billion in annual revenue. The company is divided into two reportable segments 1) agriculture and turf and 2) construction and forestry. Approximately 55% of Deere equipment is sold in North America and Canada. The principle products harvested by Deere equipment include grain, oilseeds, cotton, sugar, and biomass. In 2018, agriculture and turf made up approximately 70% of total revenue while construction and forestry generated 30%.

Already a member?

Login to see your Stocks to Watch Trade Ideas.

Not yet a member?

Receive a Morning Action trade idea every market day in the Morning Update, plus Stocks to Watch Trade Ideas every Saturday.

Become A Member