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Analysts Are Divided before Deere’s 1Q17 Results

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Analysts’ recommendations for Deere

As of  February 13, 2017, 22 brokerage firms were actively tracking Deere (DE) stock. About 36% of the analysts recommended a “buy” for the stock, 46% of the analysts recommended a “hold,” and 18% recommended a “sell.”

Analysts’ consensus indicates a 12-month target price of $102.65 for Deere. It implies a return potential of -7.3% based on its closing price of $110.75 on February 13, 2017.

Why are analysts divided?

Analysts’ opinion on Deere appears to be widely divided primarily due to lower guidance from the company. Another influencing factor seems to be the declining farm income. As a result, farm equipment sales fell.

Recommendations and targets

Recommended target prices for Deere from some well-known brokerage firms are as follows:

  • On January 19, 2017, Credit Suisse (CS) raised Deere’s target price to $132 from its previous target price of $120. It implies a 12-month return of 19.2% based on the closing price of $110.75 on February 13, 2017.
  • On January 18, 2017, Deutsche Bank (DB) provided Deere’s target price at $106. It implies a 12-month return of -4.3% based on the closing price of $110.75 as of February 13, 2017.
  • On January 13, 2017, Seaport Global announced Deere’s target price at $98. It implies a 12-month potential return of -11.50% based on the closing price of $110.75 as of February 13, 2017.

Investors can invest in First Trust Indxx Global Agriculture ETF (FTAG) to hold Deere indirectly. The fund invested 4.8% in Deere. The fund’s other top holding includes Dow Chemical (DOW). It has a weight of 10.5% as of February 13, 2017.

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