Can Deere Turn Itself Around With Earnings?

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Deere & Co. (NYSE: DE) is scheduled to report its fiscal third-quarter financial results before the markets open on Friday. After getting through the previous quarter by the skin of its teeth, Deere was hoping to turn the most recent quarter around, even as it lagged through the summer.

The consensus estimates from Thomson Reuters are $0.94 in earnings per share (EPS) on $6.09 billion in revenue. In the same period of the previous year, Deere posted EPS of $1.53 and $6.84 billion in revenue.

The company’s second-quarter performance reflected the continuing impact of the downturn in the global farm economy and further weakness in the construction equipment sector. Considering challenging market conditions in the period, Deere’s businesses benefited from the sound execution of operating plans and its success in creating a more flexible cost structure.

Although previous forecasts have called for lower results this year in light of ongoing market pressures, management believes that Deere is continuing to perform at a much higher level than in previous downturns.

Over the course of this latest quarter, a few analysts have issued calls on Deere:

  • BMO Capital Markets reiterated an Outperform rating with a $96 price target.
  • Piper Jaffray has an Underweight rating with a $67 price target.
  • Morgan Stanley reiterated a Sell rating.
  • Goldman Sachs has a Buy rating with a $105 price target.
  • Macquarie reiterated an Underperform rating.
  • Barclays reiterated an Underweight rating with a $63 price target.
  • Jefferies reiterated a Hold rating.
  • Cowen has an Outperform rating.

In 2016 alone, Deere has underperformed the broad markets, with the stock up only 3%. Over the past 52 weeks, the numbers get worse, with the stock down 15%.

Shares of Deere were trading at $77.63 on Thursday. The stock has a consensus analyst price target of $77.72 and a 52-week trading range of $70.16 to $92.45.