Deere Investors, I've Found Your Inflationary Hedge
William Koldus, CFA, CAIA • 26 Comments
William Koldus, CFA, CAIA • 26 Comments
Is Deere's Current High ROIC Business Model Sustainable For The Long Term?
Blue Pacific Partners • 32 Comments
Blue Pacific Partners • 32 Comments
Wed, Mar. 2, 6:37 PM
- Machinery stocks such as Terex (NYSE:TEX), Caterpillar (NYSE:CAT), Deere (NYSE:DE), Cummins (NYSE:CMI), Joy Global (NYSE:JOY) and Manitowoc (NYSE:MTW) may have come too far too fast, J.P. Morgan analyst Ann Duignan asserts.
- Duignan notes that at year-end 2015, the firm's machinery coverage was trading at a P/E multiple of ~14x estimated 2016 earnings, but at March 1, the group was trading at 16.3x; in terms of total shareholder returns, the group was up 5.5%, outperforming the S&P 500's YTD 2.8% loss.
- Within construction stocks, TEX (+25.9%), CMI (+15.1%), MTW (+5.3%) and CAT (+3.0%) have outperformed while Oshkosh (NYSE:OSK) (-9.2%) has underperformed; in agriculture machinery, Agco (NYSE:AGCO) (+11.1%), Deere (+6.3%) and CNH Industrial (NYSE:CNHI) (-2.2%) have outperformed, while JOY (+5.9%) has outperformed in the mining equipment group.
Fri, Feb. 26, 12:17 PM
- Caterpillar (CAT +1.4%) and Deere (DE +0.3%) announce plans to cut a combined 170 jobs in their factories, in another step in the consolidation of the U.S. heavy machinery sector.
- CAT says it is halting production of its on-highway trucks at its plant in Texas, eliminating 70 jobs, and DE will lay off 100 employees from two of its factories in Iowa that make construction and forestry machinery.
- Both companies have faced declining sales as global construction activity slows.
Wed, Feb. 24, 11:20 AM
Wed, Feb. 24, 9:25 AM
- Argus has upgraded Deere (NYSE:DE) to Buy from Hold, saying the company's margins will rebound in the next few years.
- Analyst John Eade: "Given the currency and commodity trends, Deere's earnings have been consistently declining for several quarters. But we think margins are near all-time low levels and will rebound over the next 2-3 years as conditions improve."
- However, the firm cut its fiscal 2016 diluted EPS estimate to $4.10-$4.19, citing weak agricultural commodity prices that are expected to pressure Deere's equipment sales.
- "Given our outlook for the dollar and the recent upswing in commodity prices, along with our expectations that management will continue to focus on profitability, we are maintaining our FY17 diluted EPS estimate of $4.42. Our long-term earnings growth rate forecast is 7%," Eade continued.
Mon, Feb. 22, 9:08 AM| Mon, Feb. 22, 9:08 AM
Fri, Feb. 19, 2:38 PM
- Deere (DE -4.3%) tumbles to its lows of the day after posting better than expected FQ1 earnings but forecasting its FY 2016 sales of agriculture and turf equipment to fall by 10% vs. an earlier outlook for a 7% drop, as it anticipates "another challenging year."
- DE also trimmed its net income outlook for the year to $1.3B from $1.4B previously, which implies EPS of $4.00-$4.20, below the analyst consensus estimate of $4.24 this year.
- In its earnings conference call, DE said executing its margin-boosting strategies of cutting equipment inventories and overhead costs, raising prices on equipment, and increasing sales of replacement parts and services are becoming more difficult amid steep drops in farm and construction equipment; even with 11% lower overhead costs in FQ1, DE’s operating profit margin fell to 7.4% from 10.1% a year ago.
- DE's FQ1 construction and forestry equipment sales fell 23% Y/Y to $1.2B, and profit from the unit plunged 52% to $70M; the company now expects 2016 construction sales to drop 11% Y/Y, more than double the decline predicted in November.
- "We give Deere credit for operating well in a challenging time, but there is little reason for optimism in the next couple of years," says William Blair analyst Lawrence De Maria.
Fri, Feb. 19, 7:21 AM
- Net income of $254.4M, or $0.80 per share vs. $386.8M, or $1.12 per share, for the same period of 2014.
- Net sales decreased 13% Y/Y to $5.5B from $6.3B in the same quarter a year ago. Segment Sales: Agriculture & Turf. -12%; Construction & Forestry -23%.
- "First-quarter results reflected the continuing impact of the downturn in the global farm economy as well as weakness in construction equipment markets," CEO Samuel Allen said in a statement.
- The company now expects net income in the 12 months through October to be about $1.3B, down from a November projection of about $1.4B. Equipment sales are expected to fall about 10%, compared with an earlier prediction they would drop about 7%.
- DE -2.3% premarket.
- Here's a link to Deere's presentation.
- FQ1 results
- Now read: Caterpillar Vs. Deere: Finding The Best Value
- Deere: Great Company, Weak Stock
- The End Of The U.S. Farm Boom, And What It Means For Agriculture Stocks
Fri, Feb. 19, 6:54 AM
Thu, Feb. 18, 5:30 PM
Thu, Feb. 18, 9:25 AM
- A recent regulatory filing reveals Warren Buffett boosted his stake in Deere (NYSE:DE) by about 5.8M shares to about 22.88M shares, or a 7.2% stake.
- Berkshire Hathaway is now the company's largest institutional shareholder with holdings worth nearly $2B.
- After sinking 14% in 2015, Deere's stock is up about 7% this year through Wednesday - handily beating the S&P 500 and outperforming even Apple, Facebook, and Alphabet.
- Deere is set to report fiscal first quarter earnings before the bell on Friday.
- DE +1.5% premarket
- SEC Form 13G
Dec. 2, 2015, 12:07 PM
- Deere (NYSE:DE) declares $0.60/share quarterly dividend, in line with previous.
- Forward yield 3.02%
- Payable Feb. 1; for shareholders of record Dec. 31; ex-div Dec. 29.
Nov. 30, 2015, 9:10 AM| Nov. 30, 2015, 9:10 AM | 4 Comments
Nov. 27, 2015, 11:59 AM
- Deere (DE -1.2%) is maintained with an Outperform rating and $87 price target at Credit Suisse, after better ag margins enabled the company to report Q4 results ahead of expectations.
- DE expects to underproduce retail demand again in HHP but not to the same degree as FY 2015, with production more in line with retail demand moving into H2 2016, Credit Suisse says.
- The firm notes the company’s CFO is expected to be strong at $2.6B, with excess cash likely to be used for niche M&A and share repurchases.
- Credit Suisse cuts its FY 2016 EPS estimate to $4.35 from $4.45 but maintains its $5.55 estimate for 2017.
Nov. 25, 2015, 7:28 AM
- Net income of $351.2M, or $1.08 per share vs. $649.2M, or $1.83 per share, for the same period of 2014.
- Net sales decreased 25% Y/Y to $6.7B from $9B in the same quarter a year ago. Segment Sales: Agriculture & Turf. -25%; Construction & Forestry -32%.
- Guidance: Company equipment sales are projected to decrease about 7% for fiscal 2016 and to be down about 11% for the first quarter compared with year-ago periods. Fiscal 2016 earnings are expected to be approximately $1.4B.
- "Sales and earnings for the year were the sixth-highest in company history," said CEO Samuel Allen. "Although our forecast calls for lower results in the year ahead, the outlook represents a level of performance that is better than Deere has experienced in previous downturns."
- FQ4 results
- DE +5.1% premarket
Nov. 25, 2015, 6:55 AM
- Deere (NYSE:DE): FQ4 EPS of $1.08 beats by $0.33.
- Revenue of $6.72B (-16.4% Y/Y) beats by $590M.
Nov. 24, 2015, 5:30 PM
Deere & Co. manufactures and distributes a complete line of equipment used in agriculture, construction, forestry, and turf care. It also manufactures engines and other power train components. The company also provides credit and other services to customers around the world. The company operates... More
Sector: Industrial Goods
Industry: Farm & Construction Machinery
Country: United States
Other News & PR