Deere & Company (DE Quick QuoteDE - Free Report) scaled a fresh 52-week high of $448.80 during the trading session on Nov 23, before closing slightly lower at $437.52. This came from solid fourth-quarter fiscal 2022 results, wherein DE reported an 81% surge in earnings per share while equipment operations’ revenues rose 40%.

 

Continued strong demand and higher shipment volumes offset steep costs and helped Deere shine in the quarter. An improved scenario in the agricultural, construction and forestry sector is favoring DE.

 

DE has a market capitalization of $125.7 billion and a Zacks Rank #3 (Hold), currently.

Shares of Deere have gained 19% in the past year compared with the industry’s growth of 11.7%.

Deere’s net sales of equipment operations (comprising Agriculture and Turf, Construction and Forestry) were $14.3 billion in the fourth quarter of fiscal 2022, up 40% from the prior-year fiscal quarter’s levels. Earnings were $7.44 per share, marking an 81% surge from the prior-year fiscal quarter’s levels.

 

In the fourth quarter of fiscal 2022, DE made significant progress in clearing partially-completed machines from inventory. Backed by this and higher production rates, Deere reported expanded shipment volumes. As a result, DE was successful in delivering higher equipment to dealers and customers. Price realization, and improved shipment volumes and mix helped it reap better profits in the aforementioned quarter.

 

 

Deere projects net income between $8 billion and $8.5 billion for fiscal 2023. Net sales for Production & Precision Agriculture are expected to grow in the 15% to 20% range for fiscal 2023 from the prior-year fiscal quarter’s levels. Sales growth for Small Agriculture & Turf is expected to be flat to up 5%. The construction and forestry equipment sales for fiscal 2023 will likely be up around 10% from the previous fiscal year’s reading.

 

DE expects large agriculture equipment industry sales in the United States and Canada to be up 5-10% from the prior fiscal year’s actuals. In Europe, the agriculture and turf industry is projected to be flat to up 5%, year over year. The South American market’s industry sales of tractors and combines will likely be flat to up 5% compared to previous year. 

 

Deere anticipates record production and strong profitability for the upcoming fiscal year in the South American region, especially in Brazil. North America will likely reflect strong demand to continue surpassing the industry's ability to supply.

 

Deere projected industry sales of both earthmoving and compact construction equipment to be flat to up 5% in North America. Global forestry markets and global roadbuilding will likely be flat. The outlook implies strong demand in the American market and slower demand in the European and Asian markets.

The Zacks Consensus Estimate for Deere’s fiscal 2023 earnings is currently pegged at $26.65, suggesting growth of 11.4% from the last fiscal year’s tally. The estimate has been revised 0.2% upward in the past 30 days. 

Some better-ranked stocks in the Industrial Products sector are Enerpac Tool Group (EPAC Quick QuoteEPAC - Free Report) , Hubbell (HUBB Quick QuoteHUBB - Free Report) and W.W. Grainger (GWW Quick QuoteGWW - Free Report) . While EPAC and HUBB sport a Zacks Rank #1 (Strong Buy), GWW holds a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

 

Enerpac Tool Group has an earnings growth estimate of 44.6% for the current year. The estimates have been unchanged over the past 30 days. EPAC’s shares have rallied 10.2% over the year. It has a trailing four-quarter surprise of 3.4%, on average.

 

Hubbell has an average trailing four-quarter earnings surprise of 10.6%. The stock has gained 22.8% in the past year. HUBB’s earnings growth estimate for fiscal 2022 is 6.7%. The consensus mark has been revised 4.8% upward in the past 30 days.

 

W.W. Grainger has a trailing four-quarter average surprise of 10.1%. The Zacks Consensus Estimate for GWW’s 2022 earnings indicates 16.6% growth from the year-ago reported number. The consensus estimate has increased 4.1% over the past 30 days. The stock has jumped 21.2% in the past year.