Deere started at Buy at Stifel amid firming markets, cost takeouts

|By:, SA News Editor

Deere (DE -0.1%) is initiated with a Buy rating and $126 price target at Stifel, which sees the company as the top manufacturer of agricultural and construction machinery.

Stifel says the markets for Agricultural and Turf and Construction and Forestry have been under considerable pressure since 2013-14, yet DE has managed decrementals in the mid-20% range, and many of these markets now appear to be firming.

Stifel believes these firming markets coupled with the cost takeouts set the stage for considerably improved results when the firm sees markets beginning to turn in 2018.

The firm also starts coverage of AGCO (AGCO -1.3%) with a Hold rating and $64 price target, saying it prefers to wait to get more aggressive until receiving more clarity on the inflection of large ag equipment.