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Deere (DE) Gains But Lags Market: What You Should Know

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Deere (DE - Free Report) closed at $364.75 in the latest trading session, marking a +0.06% move from the prior day. This move lagged the S&P 500's daily gain of 0.25%. At the same time, the Dow lost 0.26%, and the tech-heavy Nasdaq lost 0.54%.

Coming into today, shares of the agricultural equipment manufacturer had lost 12.9% in the past month. In that same time, the Industrial Products sector lost 11.53%, while the S&P 500 lost 11.03%.

Investors will be hoping for strength from Deere as it approaches its next earnings release, which is expected to be May 20, 2022. In that report, analysts expect Deere to post earnings of $6.65 per share. This would mark year-over-year growth of 17.08%. Our most recent consensus estimate is calling for quarterly revenue of $13.44 billion, up 22.22% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $22.69 per share and revenue of $48.18 billion, which would represent changes of +19.48% and +21.24%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Deere. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.29% lower within the past month. Deere is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, Deere is currently trading at a Forward P/E ratio of 16.07. This represents a premium compared to its industry's average Forward P/E of 14.14.

Also, we should mention that DE has a PEG ratio of 1.19. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Manufacturing - Farm Equipment stocks are, on average, holding a PEG ratio of 1.19 based on yesterday's closing prices.

The Manufacturing - Farm Equipment industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 101, which puts it in the top 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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