Will Deere & Co. (DE) Stock Leap on Earnings?

What's Happening With DE View more about DE >

Heavy machinery maker Deere & Co. (DE) will report its fiscal first-quarter results before the market open February 15. The consensus calls for earnings of $1.80 per share and revenue of $6.89 billion for the quarter. During the same period last year the company earned $1.31 and had sales of $6.91 billion.

Technical Analysis

DE was recently trading at $161.20 down $14.06 from its 12-month high and $32.88 above its 12-month low. InvestorsObserver’s Stock Score Report gives DE a 67 long-term technical score and a 54 short-term technical score. The stock has recent support above $157.5 and recent resistance below $165. Of the 12 analysts who cover the stock 7 rate it Strong Buy, 1 rate it Buy, 4 rate it Hold, 0 rate it Sell, and 0 rate it Strong Sell, DE gets a score of 61 from InvestorsObserver’s Stock Score Report.

Analysts' Thoughts

DE stock is currently trading near its 52-week high, and could reach a new high on a strong set of quarterly numbers. The stock did take a hit late in January in sympathy to a disappointing quarterly report from its main competitor, Caterpillar (CAT). Caterpillar missed its estimates as well as issuing weaker than expected guidance. Both CAT and DE sold off following the report, and while CAT has yet to recover, DE stock quickly bounced back thanks to strength in the overall market and optimism over trade negotiations between the U.S. and China. The big move down Caterpillar made following its quarterly report shows that the market will be quick to punish DE if it reports similarly weak results or offers a downbeat outlook for the current quarter.

The stock’s quick ability to rebound shows that traders remain upbeat, and analysts have an average price target of $176.77 on the stock. DE trades with a forward P/E of just 12.5, so the downside is somewhat limited, but current shareholders may still want to have an exit strategy in place just in case the stock does take a big hit like CAT’s post-earnings drop.

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%.

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