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Can Deere’s Stock Price Continue to Rise?


Dec. 19 2017, Updated 9:01 a.m. ET

Deere’s stock performance

As we near the end of 2017, Deere’s (DE) stock price has risen 2017. As of December 14, 2017, Deere has risen 45.0% and managed to outperform the broad-based SPDR S&P 500 ETF (SPY), which has returned 18.80%. However, Deere underperformed its peers Caterpillar (CAT) and CNH Industrials (CNHI), which have risen 57.70% and 49.80%, respectively. Deere managed to outperform AGCO (AGCO), which rose 24.70%.

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Deere’s strong performance was driven by good quarterly results, especially in fiscal 4Q17. Deere reported earnings per share of $1.57—compared to $0.90 the previous year. Deere’s revenues stood at $8.01 billion. For fiscal 2017, Deere reported revenues of $29.74 billion—compared to $26.64 billion in 2016, which was ~12.0% growth.

Deere expects its fiscal 2018 revenue to grow 22% due to the acquisition of Wirtgen Group. The acquisition is expected to be completed by December 2017. Deere expects Wirtgen Group to contribute ~$3.1 billion in revenue in fiscal 2018. The favorable currency is also expected to contribute to the revenue growth. So, Deere is set to deliver a strong performance in 2018. It hopes that the stock price rally continues.

Deere’s moving average and RSI

Deere traded ~15% above the 100-day moving average price of $130.11. The stock has largely traded above the 100-day moving average price except for a short period after its fiscal 3Q17 earnings. However, the long-term trend appears to be intact. Deere’s RSI (relative strength index) of 66 indicates that the stock isn’t overbought or oversold. An RSI of 30 and below indicates that the stock has temporarily moved into an oversold position. An RSI of 70 and above suggests that the stock has temporarily moved into an overbought position.


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