Analysts’ consensus on Deere
Since the last quarter, the number of analysts tracking Deere has remained unchanged at 23. For Deere, 65% of the analysts have a “buy” recommendation, 31% of the analysts have a “hold” recommendation, and 4% of the analysts have a “sell” recommendation.
Analysts’ consensus on Deere indicates a target price of $180.75. The target price indicates a return potential of ~30.4% over the closing price of $138.65 as of August 14. The analysts have lowered Deere’s target price from the earlier target price of $185.59 due to the continued trade war between China and the US. The trade war could have a negative impact on Deere’s raw material costs.
In the previous quarter, Deere said that it would increase the prices of its products to make up for increased raw material and fuel costs. If Deere can ensure the transition of higher raw material cost to its clients, the company’s revenues, earnings, and margin would improve. As a result, many of the analysts are recommending to “buy” Deere.
Brokerage companies’ recommendations
- UBS (UBS) cut its target price for Deere from $185 to $177, which implies a potential return of 27.6% based on its closing price of $138.65 on August 14.
- Citigroup cut its target price to $190, which implies a return potential of 37% over the closing price of $138.65.
- J.P. Morgan (JPM) reduced its target price on Deere to $145 from the earlier recommendation of $154, which implies a return potential of 4.6% over the closing price as of August 14.
Investors can get indirect exposure to Deere through the Natural Resources ETF (HAP), which held 8.2% of its portfolio in Deere as of August 14. The fund also provides exposure CNH Industrial (CNHI) with a weight of 2.1%.