We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Buy Deere (DE) Stock Ahead of Earnings?
Read MoreHide Full Article
Shares of Deere & Company (DE - Free Report) sunk over 2% through early afternoon trading Wednesday in a sign that investors might be nervous about the firm ahead of its quarterly earnings release, which is scheduled for Friday. Unfortunately, Deere’s dip is part of a much larger decline over the last six months. Yet, Deere’s top and bottom lines are projected to soar this quarter.
Overview
Deere did report a GAAP net loss of $535.1 million in its first fiscal quarter of 2018, which the company said was mainly due to the massive U.S. tax reforms. And the agricultural and construction equipment powerhouse has been negatively impacted by the ongoing trade disputes between the U.S. and China, as investors worry the company’s costs could climb.
However, the firm reported net income of $1.21 billion, with revenues up 29%, in its second quarter.
More recently, the company’s upbeat outlook is based on higher housing starts in the U.S. and an improved oil and gas sector. Deere also noted that it expects its June 2017 acquisition of the German-headquartered manufacturer of road construction equipment, Wirtgen Group, to have a positive impact on its sales. Furthermore, the economic environment for the construction, forestry, and road building industries look strong.
Investors should also note that Caterpillar (CAT - Free Report) raised its 2018 guidance despite growing concerns about economic headwinds.
Stock Price Movement
Shares of DE are up roughly 44% over the last three years, which outpaces the S&P 500’s 35% climb. This movement also tracks its industry’s climb. Over the last 24 months, Deere stock has soared over 73% against the S&P’s 31% jump. However, shares of DE have performed much worse as we narrow the focus.
DE stock is up just 7% over the last year, which lags the S&P’s 15% climb. Much worse still, shares of Deere have plummeted by more than 13% since the start of the year.
Valuation
Moving on, DE’s recent downturn has not only made its stock price look much cheaper—resting nearly $40 below its 52-week high of $175.26 per share—but also made its valuation picture look much better. Deere is currently trading at 12.5X forward 12-month Zacks Consensus EPS estimates, which is just above its year-long low of 12.3X that it reached in late July.
DE stock is trading at a huge discount to its year-long high of 20.8X and well below its 17X median. Deere is also trading below its industry’s 15.2X average—which includes Terex (TEX - Free Report) and Manitowoc (MTW - Free Report) —and the S&P’s 17.3X. Plus, Deere is currently trading right at its lowest earning multiple over a three-year stretch. Therefore, investors should be able to say with confidence that Deere stock presents amazing value at the moment, especially considering its strong outlook.
Outlook
Deere is projected to see its quarterly revenues soar by over 34% to hit $9.17 billion, based on our current Zacks Consensus Estimate. Looking a bit further down the road, the company is expected to post full-year revenues of $33.74 billion, which would mark a more than 30% climb from a year ago.
Meanwhile, DE’s adjusted quarterly earnings are projected to soar by 40.61% to $2.77 per share, while its fiscal year earnings are expected to skyrocket 45%.
Bottom Line
Deere’s EPS projection has climbed by $0.19 over the duration of the quarter, which means that analysts’ earnings sentiment has gone way up. The company also has a strong management team that has seen it top our quarterly earnings estimates nearly every quarter over the last five-plus years, with last quarter the lone outlier.
Deere is currently a Zacks Rank #3 (Hold) and sports a “B” grade for Value and an “A” for Momentum in our Style Scores system. With all that said, investors might want to consider buying DE stock ahead of earnings.
Deere is scheduled to report its Q3 financial results before the opening bell on Friday, August 17.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Should You Buy Deere (DE) Stock Ahead of Earnings?
Shares of Deere & Company (DE - Free Report) sunk over 2% through early afternoon trading Wednesday in a sign that investors might be nervous about the firm ahead of its quarterly earnings release, which is scheduled for Friday. Unfortunately, Deere’s dip is part of a much larger decline over the last six months. Yet, Deere’s top and bottom lines are projected to soar this quarter.
Overview
Deere did report a GAAP net loss of $535.1 million in its first fiscal quarter of 2018, which the company said was mainly due to the massive U.S. tax reforms. And the agricultural and construction equipment powerhouse has been negatively impacted by the ongoing trade disputes between the U.S. and China, as investors worry the company’s costs could climb.
However, the firm reported net income of $1.21 billion, with revenues up 29%, in its second quarter.
More recently, the company’s upbeat outlook is based on higher housing starts in the U.S. and an improved oil and gas sector. Deere also noted that it expects its June 2017 acquisition of the German-headquartered manufacturer of road construction equipment, Wirtgen Group, to have a positive impact on its sales. Furthermore, the economic environment for the construction, forestry, and road building industries look strong.
Investors should also note that Caterpillar (CAT - Free Report) raised its 2018 guidance despite growing concerns about economic headwinds.
Stock Price Movement
Shares of DE are up roughly 44% over the last three years, which outpaces the S&P 500’s 35% climb. This movement also tracks its industry’s climb. Over the last 24 months, Deere stock has soared over 73% against the S&P’s 31% jump. However, shares of DE have performed much worse as we narrow the focus.
DE stock is up just 7% over the last year, which lags the S&P’s 15% climb. Much worse still, shares of Deere have plummeted by more than 13% since the start of the year.
Valuation
Moving on, DE’s recent downturn has not only made its stock price look much cheaper—resting nearly $40 below its 52-week high of $175.26 per share—but also made its valuation picture look much better. Deere is currently trading at 12.5X forward 12-month Zacks Consensus EPS estimates, which is just above its year-long low of 12.3X that it reached in late July.
DE stock is trading at a huge discount to its year-long high of 20.8X and well below its 17X median. Deere is also trading below its industry’s 15.2X average—which includes Terex (TEX - Free Report) and Manitowoc (MTW - Free Report) —and the S&P’s 17.3X. Plus, Deere is currently trading right at its lowest earning multiple over a three-year stretch. Therefore, investors should be able to say with confidence that Deere stock presents amazing value at the moment, especially considering its strong outlook.
Outlook
Deere is projected to see its quarterly revenues soar by over 34% to hit $9.17 billion, based on our current Zacks Consensus Estimate. Looking a bit further down the road, the company is expected to post full-year revenues of $33.74 billion, which would mark a more than 30% climb from a year ago.
Meanwhile, DE’s adjusted quarterly earnings are projected to soar by 40.61% to $2.77 per share, while its fiscal year earnings are expected to skyrocket 45%.
Bottom Line
Deere’s EPS projection has climbed by $0.19 over the duration of the quarter, which means that analysts’ earnings sentiment has gone way up. The company also has a strong management team that has seen it top our quarterly earnings estimates nearly every quarter over the last five-plus years, with last quarter the lone outlier.
Deere is currently a Zacks Rank #3 (Hold) and sports a “B” grade for Value and an “A” for Momentum in our Style Scores system. With all that said, investors might want to consider buying DE stock ahead of earnings.
Deere is scheduled to report its Q3 financial results before the opening bell on Friday, August 17.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>