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Deere (DE) Stock Slides Ahead of Earnings: What to Expect
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Shares of Deere & Company (DE - Free Report) slid 2.7% during regular trading hours Tuesday, the last session before the agricultural equipment maker is scheduled to release its latest quarterly earnings results. Deere’s losses outpaced losses seen by broader indexes in what was a tough day for many stocks, underscoring Wall Street’s nervousness about the company’s report.
Deere & Co. is the parent company of John Deere, one of the most iconic brands in agriculture. Deere’s core business is farm equipment, but it also sells construction and forestry equipment and provides financial services to borrowing customers.
Shares of Deere & Co. are down roughly 10% on the year ahead of its report, largely due to industry specific headwinds. Notably, the agriculture business has been hampered by supply and demand issues—evidenced by low stocks-to-use ratios in key crops—and global trade concerns. Deere has thus far said that replacement demand is outweighing tariff pressure, but whether that trend can hold up is unclear.
Moreover, Deere has grappled with elevated expenses throughout the current fiscal year. Management said this is a result of an unfavorable product mix, higher overhead, and increased incentive compensation.
Deere still has time to turn things around and end the year positive, however. An excellent earnings report tomorrow would certainly help in that task. Let’s take a closer look at the market’s expectations to see how likely that is.
Deere & Co. will report it fiscal 2018 fourth quarter financial results before the opening bell on Wednesday morning. Here’s what analysts are expecting, according to our latest Zacks Consensus Estimates.
Earnings: Deere is projected to report earnings of $2.43 per share, which would represent year-over-year growth of 54.8%. There has been one positive revision to these estimates within the past week, lifting the consensus by a penny.
Positive estimates just ahead of a report are generally a bullish indicator, but a number of negative revisions to next-quarter and next-year estimates have dragged the stock to a Zacks Rank #4 (Sell). Moreover, our Most Accurate Estimate—a metric that averages the most recent estimates—sits at $3.36, about 2.7% lower than the consensus.
Despite a positive revision in the past week, recently issued estimates have likely not been upbeat.
Revenue: Analysts have Deere’s revenue for the quarter pegged at $8.59 billion. This would represent growth of 21.1% from the $7.09 billion recorded in the prior-year quarter. Full-year revenue is expected to total $33.7 billion.
Bottom Line
The earnings trend for Deere has been mixed ahead of its report, and the stock has already struggled in the face of several specific headwinds this year. This market basically demands a strong beat-and-raise quarter if a stock wants to see an uptick in the immediate aftermath of a report, so the pressure is on Deere to deliver.
There’s no saying that the company can’t impress Wall Street tomorrow, but some trends look to be stacking against the company.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Deere (DE) Stock Slides Ahead of Earnings: What to Expect
Shares of Deere & Company (DE - Free Report) slid 2.7% during regular trading hours Tuesday, the last session before the agricultural equipment maker is scheduled to release its latest quarterly earnings results. Deere’s losses outpaced losses seen by broader indexes in what was a tough day for many stocks, underscoring Wall Street’s nervousness about the company’s report.
Deere & Co. is the parent company of John Deere, one of the most iconic brands in agriculture. Deere’s core business is farm equipment, but it also sells construction and forestry equipment and provides financial services to borrowing customers.
Shares of Deere & Co. are down roughly 10% on the year ahead of its report, largely due to industry specific headwinds. Notably, the agriculture business has been hampered by supply and demand issues—evidenced by low stocks-to-use ratios in key crops—and global trade concerns. Deere has thus far said that replacement demand is outweighing tariff pressure, but whether that trend can hold up is unclear.
Moreover, Deere has grappled with elevated expenses throughout the current fiscal year. Management said this is a result of an unfavorable product mix, higher overhead, and increased incentive compensation.
Deere still has time to turn things around and end the year positive, however. An excellent earnings report tomorrow would certainly help in that task. Let’s take a closer look at the market’s expectations to see how likely that is.
Deere & Company Price, Consensus and EPS Surprise
Deere & Company Price, Consensus and EPS Surprise | Deere & Company Quote
Earnings Outlook
Deere & Co. will report it fiscal 2018 fourth quarter financial results before the opening bell on Wednesday morning. Here’s what analysts are expecting, according to our latest Zacks Consensus Estimates.
Earnings: Deere is projected to report earnings of $2.43 per share, which would represent year-over-year growth of 54.8%. There has been one positive revision to these estimates within the past week, lifting the consensus by a penny.
Positive estimates just ahead of a report are generally a bullish indicator, but a number of negative revisions to next-quarter and next-year estimates have dragged the stock to a Zacks Rank #4 (Sell). Moreover, our Most Accurate Estimate—a metric that averages the most recent estimates—sits at $3.36, about 2.7% lower than the consensus.
Despite a positive revision in the past week, recently issued estimates have likely not been upbeat.
Revenue: Analysts have Deere’s revenue for the quarter pegged at $8.59 billion. This would represent growth of 21.1% from the $7.09 billion recorded in the prior-year quarter. Full-year revenue is expected to total $33.7 billion.
Bottom Line
The earnings trend for Deere has been mixed ahead of its report, and the stock has already struggled in the face of several specific headwinds this year. This market basically demands a strong beat-and-raise quarter if a stock wants to see an uptick in the immediate aftermath of a report, so the pressure is on Deere to deliver.
There’s no saying that the company can’t impress Wall Street tomorrow, but some trends look to be stacking against the company.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>