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Wall Street’s Views on Deere after Fiscal 3Q17 Earnings

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Analyst consensus

The number of analysts covering Deere (DE) stock has increased from 20 to 21. Among them, 33.0% have recommended a “buy” for the stock, and 62.0% have recommended a “hold.” The remaining 5.0% have recommended a “sell.”

The analyst consensus for Deere’s 12-month target price has fallen from $131.83 to $130.61, implying a return potential of 11.3% over the closing price on August 18, 2017.

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Why most analysts recommend a ‘hold’

Deere’s earnings have been beating analysts’ estimates for several quarters. Although Deere missed analysts’ expectation on revenue, it still managed to post higher revenue growth on a year-over-year basis. The company remains confident about revenue growth for equipment operations in fiscal 2017. As a result, many analysts are recommending a “hold” for the stock.

Recommendations from individual brokerage firms

  • Deutsche Bank (DB) rated Deere a “hold” with a target price of $135, implying a potential return of 15.0% based on its closing price of $117.31 on August 18, 2017.
  • Credit Suisse (CS) has rated Deere an “outperform” with a target price of $148, which implies a potential return of 26.0% based on its closing price of $117.31 on August 18, 2017.
  • RBC Capital has recommended a target price of $134 for Deere, implying a potential return of 14.2% based on its closing price of $117.31 on August 18, 2017.

Investors can indirectly hold Deere by investing in the VanEck Vectors Natural Resources ETF (HAP), which has invested 5.9% of its portfolio in Deere. The fund also holds Monsanto (MON) with a weight of 8.0% as of August 18, 2017.

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