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

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In the latest trading session, Deere (DE - Free Report) closed at $369.65, marking a -1.12% move from the previous day. This change lagged the S&P 500's 0.36% gain on the day. At the same time, the Dow added 0.01%, and the tech-heavy Nasdaq gained 1.91%.

Prior to today's trading, shares of the agricultural equipment manufacturer had lost 11.9% over the past month. This has lagged the Industrial Products sector's loss of 8.68% and the S&P 500's gain of 1.24% in that time.

Deere will be looking to display strength as it nears its next earnings release. On that day, Deere is projected to report earnings of $8.50 per share, which would represent year-over-year growth of 24.82%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.78 billion, up 22.84% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $30.47 per share and revenue of $54.5 billion, which would represent changes of +30.88% and +13.74%, respectively, from the prior 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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Deere currently has a Zacks Rank of #1 (Strong Buy).

Investors should also note Deere's current valuation metrics, including its Forward P/E ratio of 12.27. For comparison, its industry has an average Forward P/E of 12.32, which means Deere is trading at a discount to the group.

Also, we should mention that DE has a PEG ratio of 1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Manufacturing - Farm Equipment was holding an average PEG ratio of 1 at yesterday's closing price.

The Manufacturing - Farm Equipment industry is part of the Industrial Products sector. This industry currently has a Zacks Industry Rank of 16, which puts it in the top 7% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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