Deere and Co (DE) $345 Industrial cyclical, Value Stock. Hold for now.
Deere underperformed CAT this year losing 20% but was OK in the last 5 and 10 with 135% and 308% share price growth.
- Deere’s focus is specializing in heavy equipment for agriculture, construction, and forestry sectors.
- This year is bad – Recent weak guidance and sales declines because of crop prices. The next two years’ forecast is also negative for both earnings and revenues
- But overall, in the last 10 years, Deere’s revenue growth has been far superior at 6% earnings in double digits as compared to CAT
- With a focus on cost reduction and expense management, Deere will improve but I suspect it could take at least year for some tangible results and its share price and valuation is not that low, we may see a bottom about 10-20% lower.