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Deere (DE) Gains As Market Dips: What You Should Know

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Deere (DE - Free Report) closed at $428.20 in the latest trading session, marking a +0.41% move from the prior day. This change outpaced the S&P 500's 0.08% loss on the day. Elsewhere, the Dow lost 0.34%, while the tech-heavy Nasdaq added 11.55%.

Coming into today, shares of the agricultural equipment manufacturer had lost 1.92% in the past month. In that same time, the Industrial Products sector lost 2.04%, while the S&P 500 lost 1.03%.

Deere will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $5.49, up 88.01% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $11.42 billion, up 33.92% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $27.85 per share and revenue of $54.28 billion. These totals would mark changes of +19.63% and +13.29%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Deere. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 1% higher. Deere is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, Deere currently has a Forward P/E ratio of 15.32. Its industry sports an average Forward P/E of 13.47, so we one might conclude that Deere is trading at a premium comparatively.

Meanwhile, DE's PEG ratio is currently 1.28. 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. The Manufacturing - Farm Equipment industry currently had an average PEG ratio of 1.28 as of yesterday's close.

The Manufacturing - Farm Equipment industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 89, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DE in the coming trading sessions, be sure to utilize Zacks.com.


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