Deere Could Hit New All-Time High on Strong Q3 Earnings; Target Price $421

Deere & Company, the world’s largest maker of farm equipment, is expected to report its fiscal third-quarter earnings of $4.57 per share, which represents year-over-year growth of over 77% from $2.57 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the agricultural, construction, and forestry equipment manufacturer has delivered an earnings surprise of over 65%. The company forecasts net income for fiscal 2021 in the range of $5.3 billion to $5.7 billion, up from the previous projection of $4.6 billion to $5 billion, according to ZACKS Research.

Deere shares have gained over 43% so far this year. The stocks traded 0.26% lower at $384.56 on Friday. But next week’s better-than-expected results could help the stock hit new all-time highs.

Analyst Comments

Deere (DE) is one of the highest quality, most defensive names within the broader Machinery universe, given a historically lower cyclicality of Ag Equipment and history of strong management execution. FY21 should mark a tangible acceleration in the NA large ag replacement cycle, as commodity tailwinds are complemented by moderating trade headwinds and improving farmer sentiment,” noted Courtney Yakavonis, equity analyst at Morgan Stanley.

“With mgmt continuing to execute against its 15% mid-cycle operating margin target, we see continued momentum in DE’s margin improvement narrative – representing one of the most attractive idiosyncratic margin improvement narratives in the broader Machinery group.”

Deere Stock Price Forecast

Eleven analysts who offered stock ratings for Deere in the last three months forecast the average price in 12 months of $421.50 with a high forecast of $450.00 and a low forecast of $346.00.

The average price target represents a 9.61% change from the last price of $384.54. From those 11 analysts, eight rated “Buy”, two rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $442 with a high of $646 under a bull scenario and $209 under the worst-case scenario. The firm gave an “Overweight” rating on the farm equipment maker’s stock.

Several other analysts have also updated their stock outlook. Credit Suisse raised the target price to $439 from $427. JPMorgan lifted the target price to $346 from $330. UBS increased the target price to $391 from $360.

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This article was originally posted on FX Empire