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Inside Deere’s Analyst Recommendations ahead of the Fiscal 3Q17 Results

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The analysts’ consensus

The number of analysts’ covering Deere (DE) has changed from 23 analysts to 21 analysts in the past two months. Among these analysts, 43% have recommended the stock as a “buy,” while 52% have recommended a “hold,” and the remaining 5% have recommended a “sell.”

The analysts’ consensus indicates Deere’s 12-month target price to be at $132.94, implying a potential return of 3.4% from its closing price of $128.57 on August 14, 2017.

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Why analysts are recommending a “hold”

Deere posted strong fiscal 2Q17 earnings and beat the analysts’ estimates. DE is positive about external economic conditions and has forecast revenue growth of 9% for fiscal 2017.

DE has also acquired Wirtgen Group for ~4.36 billion euros. Wirtgen recorded 2.36 billion euros in sales in fiscal 2016, ensuring that a long-term growth story is in place.

Individual recommendations

Deutsche Bank (DB) has given DE stock a target price of $139.00, implying a potential return of 8.1% based on its closing price of $128.57 on August 14.

Barclays (BCS) has rated Deere as “underweight,” with a target price of $100, which implies a potential return of -22.20% based on its closing price of $128.57 on August 14.

JPMorgan Chase (JPM) has rated Deere as a “hold,” with a target price of $122, implying a potential return of -5.1% based on its closing price of $128.57 on August 14.

Investors can indirectly hold Deere stock by investing in the Natural Resources ETF (HAP), which had 5.9% of its holdings in Deere on August 14.

In the next and final part of this series, we’ll examine Deere’s latest valuations.

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