Deere’s stock performance in 2018
In 2018, Deere’s (DE) stock performance has been muted. As of March 21, 2018, Deere had gained ~1% year-to-date, outperforming peers AGCO (AGCO), Caterpillar (CAT), and CNH Industrial (CNHI), which had fallen 7.8%, 1.1%, and 3.4%, respectively.
Deere’s revenue and earnings guidance, strong 1Q18 earnings, and continued acquisitions have helped its stock stay positive while peers are in negative territory. Deere expects its revenue to grow 29% in fiscal 2018, with adjusted earnings of $2.9 billion (upwardly revised from its previous guidance of $2.6 billion). Also, DE has been aggressively acquiring companies to ensure future growth. DE has entered into an agreement to acquire King Agro, a manufacturer of carbon-fiber technology products headquartered in Valencia, Spain.
Although Deere has lost ground since peaking at $171.49 in January, it has managed to stay above its 100-day moving average of $154.83, suggesting strength. DE’s 14-day relative strength index score of 42 indicates that the stock is neither overbought nor oversold. As we’ve discussed, positive developments could drive its stock upward. Investors can indirectly hold Deere through the Vanguard Industrials ETF (VIS), which had invested 1.4% of its portfolio in Deere as of March 21, 2018.