What to Look for in Deere Earnings

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Deere & Co. (NYSE: DE) is set to report its fiscal fourth-quarter financial results before the markets open on Wednesday. The consensus estimates from Thomson Reuters are calling for $0.40 in EPS and $5.38 billion in revenue. The same period from last year had $1.08 in EPS and $5.93 billion in revenue.

The recent additional leg down in global grain prices as recently as August undermined the cyclical recovery prospects, while trends in the North American construction equipment market also remained disappointing. However the close of the U.S. presidential election has given rise to construction-related stocks, considering President-elect Trump is focused on building up infrastructure.

Back in August, Merrill Lynch saw some risks to Deere in this quarter, namely a sharper-than-expected correction in the ag cycle, further deterioration in global grain prices, a worsening used-equipment price outlook, inability to raise prices to offset Final Tier 4 expenses, unfavorable regulatory policy toward farmers, slower than expected recovery in non-residential construction, and global recession. But seemingly a Trump presidency appears to be favorable for Deere.

Ahead of the earnings report, a few analysts weighed in on Deere:

  • Baird has a Neutral rating.
  • RBC Capital has an Outperform rating.
  • Mizuho has a Neutral rating.
  • Oppenheimer has a Market Perform rating.
  • JPMorgan reiterated an Underweight rating.
  • Barclays has an Underweight rating with a $68 price target.
  • Wells Fargo has an Outperform rating.
  • Deutsche Bank has a Hold rating with a $90 price target.
  • Piper Jaffray has an Underweight rating with a $70 price target.
  • Jefferies has a Hold rating with an $85 price target.

So far in 2016, Deere has outperformed the broad markets with the stock up 21% in this time.

Shares of Deere were last trading at $92.21, with a consensus analyst price target of $85.21 and a 52-week trading range of $70.16 to $93.14.