A strong management team can guide a company through difficult periods and prepare the business for better times. This is what Deere & Co.’s management’s team has done. The past several years have been difficult for the agricultural business, but the team made some prudent cost cutting measures and shifted their focus towards other segments within the company. These moves have begun to bear fruit and now Deere & Co (DE - Free Report) is our Zacks Bull of the Day.
This Zacks Ranked #1 (Strong Buy) company is the one world's foremost producers of agricultural equipment as well as a leading manufacturer of construction, forestry, and commercial and consumer equipment. The company, in addition, provides credit, special technology, and managed health-care products and services.
Recent Earnings
The company recently announced Q2 17 earnings where they easily beat both the Zacks consensus earnings and revenue estimates. On a year over year basis the company saw gains in net income +62%, worldwide net sales +5%, worldwide revenues +5%, and net sales of equipment operations +2.2%.
Also, due to the strong performance and expected continuation of this trend, management increased FY 17 guidance in several segments; Equipment sales +9% (was +4%), Agricultural & Turf sales +8% (was +3%), and Construction & Forestry sales +13% (was +7%).
Management’s Take
According to Samuel R. Allen, chairman and chief executive officer, "John Deere reported strong results in the second quarter as market conditions showed signs of further stabilization. We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery. Deere's performance also reflects the sound execution of our operating plans, the strength of a broad product portfolio, and the impact of our actions to develop a more agile cost structure. As a result, we have raised our forecast and are now calling for significantly higher earnings for the full year."
Mr. Allen went on further to state, “Deere is demonstrating a continuing ability to produce impressive results through all phases of the business cycle. This resilience illustrates our success driving improved operating efficiencies and developing a wider range of revenue sources. It also shows the impact of the company's consistent investments in advanced technology, new products and additional markets. These actions are leading to strong performance in 2017, and they reinforce our conviction that Deere is well-positioned to deliver significant value to customers and investors over the long term.”
Acquisition Announcement
On June 1st Deere announced the acquisition of Wirtgen Group for $5.2 billion. This purchase is expected to strengthen Deere’s construction and forestry segment and expand their international presence. Wirtgen is a German road construction company with products in the road construction and mineral technology areas. This transaction is expected to close and be accretive in Q1 18.
Price and Earnings Consensus Graph
As you can see in the table below, the stock has been performing quite well since the end of 2017, and the recent earnings beat and acquisition has analysts increasing their future earnings estimates.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
A strong management team can guide a company through difficult periods and prepare the business for better times. This is what Deere & Co.’s management’s team has done. The past several years have been difficult for the agricultural business, but the team made some prudent cost cutting measures and shifted their focus towards other segments within the company. These moves have begun to bear fruit and now Deere & Co (DE - Free Report) is our Zacks Bull of the Day.
This Zacks Ranked #1 (Strong Buy) company is the one world's foremost producers of agricultural equipment as well as a leading manufacturer of construction, forestry, and commercial and consumer equipment. The company, in addition, provides credit, special technology, and managed health-care products and services.
Recent Earnings
The company recently announced Q2 17 earnings where they easily beat both the Zacks consensus earnings and revenue estimates. On a year over year basis the company saw gains in net income +62%, worldwide net sales +5%, worldwide revenues +5%, and net sales of equipment operations +2.2%.
Also, due to the strong performance and expected continuation of this trend, management increased FY 17 guidance in several segments; Equipment sales +9% (was +4%), Agricultural & Turf sales +8% (was +3%), and Construction & Forestry sales +13% (was +7%).
Management’s Take
According to Samuel R. Allen, chairman and chief executive officer, "John Deere reported strong results in the second quarter as market conditions showed signs of further stabilization. We are seeing modestly higher overall demand for our products, with farm machinery sales in South America experiencing a strong recovery. Deere's performance also reflects the sound execution of our operating plans, the strength of a broad product portfolio, and the impact of our actions to develop a more agile cost structure. As a result, we have raised our forecast and are now calling for significantly higher earnings for the full year."
Mr. Allen went on further to state, “Deere is demonstrating a continuing ability to produce impressive results through all phases of the business cycle. This resilience illustrates our success driving improved operating efficiencies and developing a wider range of revenue sources. It also shows the impact of the company's consistent investments in advanced technology, new products and additional markets. These actions are leading to strong performance in 2017, and they reinforce our conviction that Deere is well-positioned to deliver significant value to customers and investors over the long term.”
Acquisition Announcement
On June 1st Deere announced the acquisition of Wirtgen Group for $5.2 billion. This purchase is expected to strengthen Deere’s construction and forestry segment and expand their international presence. Wirtgen is a German road construction company with products in the road construction and mineral technology areas. This transaction is expected to close and be accretive in Q1 18.
Price and Earnings Consensus Graph
As you can see in the table below, the stock has been performing quite well since the end of 2017, and the recent earnings beat and acquisition has analysts increasing their future earnings estimates.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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