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Deere (DE) Stock Sinks As Market Gains: Here's Why

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Deere (DE - Free Report) ended the recent trading session at $499.14, demonstrating a -1.69% change from the preceding day's closing price. This move lagged the S&P 500's daily gain of 0.54%. Elsewhere, the Dow gained 0.52%, while the tech-heavy Nasdaq added 0.74%.

The stock of agricultural equipment manufacturer has fallen by 3.29% in the past month, lagging the Industrial Products sector's gain of 5.35% and the S&P 500's gain of 4.2%.

The upcoming earnings release of Deere will be of great interest to investors. The company is expected to report EPS of $4.62, down 26.55% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $10.26 billion, reflecting a 9.92% fall from the equivalent quarter last year.

DE's full-year Zacks Consensus Estimates are calling for earnings of $18.84 per share and revenue of $38.05 billion. These results would represent year-over-year changes of -26.46% and -14.99%, respectively.

It's also important for investors to be aware of any recent modifications to analyst estimates for Deere. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.08% upward. Deere currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Deere is currently trading at a Forward P/E ratio of 26.95. This expresses a premium compared to the average Forward P/E of 20.49 of its industry.

Investors should also note that DE has a PEG ratio of 3.22 right now. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. By the end of yesterday's trading, the Manufacturing - Farm Equipment industry had an average PEG ratio of 3.22.

The Manufacturing - Farm Equipment industry is part of the Industrial Products sector. With its current Zacks Industry Rank of 203, this industry ranks in the bottom 18% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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