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Time to Buy Deere (DE) Stock with Earnings Approaching?
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Industrial products giant Deere & Company (DE - Free Report) ) is set to round out this week’s earnings lineup with its fiscal first quarter report on Friday, February 17.
As one of the larger components of the S&P 500 and the world’s largest producer of agricultural equipment Deere’s Q1 earnings are much anticipated.
Let’s take a look at what’s going on with Deere stock before its quarterly report.
Overview & Sentiment
Deere’s Manufacturing – Farm Equipment Industry is currently in the top 14% of over 250 Zacks Industries indicating that the company should be able to benefit from a strong business environment at the moment.
This is very intriguing with Deere being the industry leader, mostly attributed to its farm machinery having advanced features and superior construction to its competitors.
Image Source: Zacks Investment Research
Most known for its famous tractors, Deere is a leader and innovator in harvesting equipment, planting equipment, seeding equipment, and precision AG technology that allows farmers to monitor, manage, and maximize farm operations.
Furthermore, Deere and construction and mining equipment manufacturer Caterpillar (CAT - Free Report) ) typically set the barometer of excellence in the broader industrial products sector.
Q1 Preview & Outlook
Deere’s Q1 earnings are projected at $5.53 per share, which would be an 89% increase from Q1 2022 EPS of $2.92 a share. Sales for the quarter are expected to be $11.31 billion, up 32% from the prior year quarter.
Image Source: Zacks Investment Research
Deere’s earnings are now forecasted to jump 20% to $28.08 a share in fiscal 2023 compared to EPS of $23.28 in 2022. Earnings are expected to rise another 4% in FY24. Even better, earnings estimate revisions have continued to trend higher for both FY23 and FY24.
On the top line, sales are forecasted to be up 12% in FY23 and rise another 2% in FY24 to $54.72 billion. More impressive, Fiscal 2024 would represent 39% growth from pre-pandemic levels with 2019 sales at $39.25 billion.
Image Source: Zacks Investment Research
Deere Earnings ESP
The Zacks Surprise Prediction indicates Deere could significantly beat quarterly expectations on its bottom line with the Zacks Consensus for Q1 EPS at $5.53 and the Most Accurate Consensus at $5.68 a share.
Image Source: Zacks Investment Research
Performance & Valuation
In the last year, Deere stock is up +7% to outperform the S&P 500 and the Machinery Farm Markets -7% performances but this has trailed fellow industrial products giant Caterpillar’s +17%. However, over the last decade, Deere’s +473% total return including dividends has topped Caterpillar, the benchmark, and its Zacks Subindustry’s +354%.
Image Source: Zacks Investment Research
Deere stock currently trades around $408 per share and 14.6X forward earnings. This is slightly above the industry average of 13.8X but Deere & Co is a proven leader in its space. Plus, DE stock trades 54% below its decade high of 31.8X and at a 12% discount to the median of 16.6X.
Image Source: Zacks Investment Research
Dividends
Thriving business can lead to dividend increases and this has been the case for Deere stock with the company raising its yield by 6% (7 cents per share) in December. Deere now has a 1.17% dividend yield which is above the industry average of 1.12%.
Image Source: Zacks Investment Research
Bottom Line
Deere stock currently sports a Zacks Rank #2 (Buy) heading into its fiscal first-quarter earnings report. The top and bottom line growth continues to be impressive in addition to DE trading attractively relative to its past from a valuation standpoint.
Lastly, it does appear that Deere may offer strong guidance as earnings estimate revisions have continued to trend higher, and if the company can also top quarterly expectations DE stock could see some nice rallies to the upside.
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Time to Buy Deere (DE) Stock with Earnings Approaching?
Industrial products giant Deere & Company (DE - Free Report) ) is set to round out this week’s earnings lineup with its fiscal first quarter report on Friday, February 17.
As one of the larger components of the S&P 500 and the world’s largest producer of agricultural equipment Deere’s Q1 earnings are much anticipated.
Let’s take a look at what’s going on with Deere stock before its quarterly report.
Overview & Sentiment
Deere’s Manufacturing – Farm Equipment Industry is currently in the top 14% of over 250 Zacks Industries indicating that the company should be able to benefit from a strong business environment at the moment.
This is very intriguing with Deere being the industry leader, mostly attributed to its farm machinery having advanced features and superior construction to its competitors.
Image Source: Zacks Investment Research
Most known for its famous tractors, Deere is a leader and innovator in harvesting equipment, planting equipment, seeding equipment, and precision AG technology that allows farmers to monitor, manage, and maximize farm operations.
Furthermore, Deere and construction and mining equipment manufacturer Caterpillar (CAT - Free Report) ) typically set the barometer of excellence in the broader industrial products sector.
Q1 Preview & Outlook
Deere’s Q1 earnings are projected at $5.53 per share, which would be an 89% increase from Q1 2022 EPS of $2.92 a share. Sales for the quarter are expected to be $11.31 billion, up 32% from the prior year quarter.
Image Source: Zacks Investment Research
Deere’s earnings are now forecasted to jump 20% to $28.08 a share in fiscal 2023 compared to EPS of $23.28 in 2022. Earnings are expected to rise another 4% in FY24. Even better, earnings estimate revisions have continued to trend higher for both FY23 and FY24.
On the top line, sales are forecasted to be up 12% in FY23 and rise another 2% in FY24 to $54.72 billion. More impressive, Fiscal 2024 would represent 39% growth from pre-pandemic levels with 2019 sales at $39.25 billion.
Image Source: Zacks Investment Research
Deere Earnings ESP
The Zacks Surprise Prediction indicates Deere could significantly beat quarterly expectations on its bottom line with the Zacks Consensus for Q1 EPS at $5.53 and the Most Accurate Consensus at $5.68 a share.
Image Source: Zacks Investment Research
Performance & Valuation
In the last year, Deere stock is up +7% to outperform the S&P 500 and the Machinery Farm Markets -7% performances but this has trailed fellow industrial products giant Caterpillar’s +17%. However, over the last decade, Deere’s +473% total return including dividends has topped Caterpillar, the benchmark, and its Zacks Subindustry’s +354%.
Image Source: Zacks Investment Research
Deere stock currently trades around $408 per share and 14.6X forward earnings. This is slightly above the industry average of 13.8X but Deere & Co is a proven leader in its space. Plus, DE stock trades 54% below its decade high of 31.8X and at a 12% discount to the median of 16.6X.
Image Source: Zacks Investment Research
Dividends
Thriving business can lead to dividend increases and this has been the case for Deere stock with the company raising its yield by 6% (7 cents per share) in December. Deere now has a 1.17% dividend yield which is above the industry average of 1.12%.
Image Source: Zacks Investment Research
Bottom Line
Deere stock currently sports a Zacks Rank #2 (Buy) heading into its fiscal first-quarter earnings report. The top and bottom line growth continues to be impressive in addition to DE trading attractively relative to its past from a valuation standpoint.
Lastly, it does appear that Deere may offer strong guidance as earnings estimate revisions have continued to trend higher, and if the company can also top quarterly expectations DE stock could see some nice rallies to the upside.