Deere’s stock performance in 2018
Deere (DE) has underperformed the broader market S&P 500 (SPY) this year. As of September 24, Deere has fallen 3.2% YTD but has managed to outperform peers AGCO (AGCO) and CNH Industrial (CNHI), which have fallen 15.7% and 6.7%, respectively. However, it has underperformed Caterpillar (CAT) marginally. CAT is down by 2.3% on a year-to-date basis.
The company’s Q3 earnings failed to meet the Wall Street estimate. However, it reported adjusted earnings per share of $2.59, implying an increase of 31.5% over the previous year. Since then the stock has recovered well and regained some of its lost ground. DE’s recovery was helped by positive business developments like the acquisition of PLA, a sprayer and planter manufacturer. Further, the new product launches and the deal with Wacker Neuson to be a strategic supplier for compact excavators helped the stock to recover. If Deere can report strong earnings in its fiscal Q4 2018, the stock could further recover the lost ground and move into the green.
Moving averages and RSI
The recovery in DE stock has resulted in the stock trading 4.2% above its 100-day moving average of $145.43, indicating an upward trajectory in the stock. Further, DE’s 14-day RSI (relative strength index) of 61 indicates that the stock is neither overbought nor oversold.